Kyiv, 11 July 2014 – “Due to the system of tax frauds and tax platforms created by previous authorities the State budget of Ukraine did not receive UAH 80 bln. Experts of the Reanimation Package of Reforms (RPR) initiative in cooperation with the Ministry for Economic Development and Trade drafted proposals to decrease corrupt schemes and increase tax revenue to the state budget,” noted Illia Nedashkovsky, PhD in Economics, RPR expert of the “Tax reform” group at a briefing in the Ukraine Crisis Media Center. “The tax reform concept will also allow to decrease the fiscal pressure on business and create conditions for beneficial cooperation among the state, business and citizens,” he added.
According to the concept expenses will be taken away from the tax authorities control and companies will be applying international standards to their accounting. It will grant freedom to business to decide on the expenses their companies are up to take for their successful development and operation.
Next crucial step is to have rates for main taxes and duties decreased – VAT, income tax and consolidated social contribution. Thus it is suggested to decrease the consolidated social contribution and fix it at 18% rate, on the first stage it is suggested to apply it only to those companies that will increase twice salaries for their staff, it is expected that it will compensate decrease of return to the state budget.
According to the Concept corporate income tax is planned to be applied exclusively to the distributed profit meaning that the money will be actually paid from dividends. If a company directs these sums for refinancing they will not be subject to taxation. According to the experts it will stimulate further growth of the companies’ main financial indicators and Ukraine’s economy on the whole. At the same time in order to compensate state budget losses on this tax return it is suggested to introduce a 1% tax on capital assets.
As to the value added tax the Concept suggests decreasing it and fixing at 7% rate for producers and at 17% for final consumers. At the same time it is suggested to introduce VAT accounts with automatic transfer of VAT to Ukraine’s state budget, it will allow to clearly trace accounting and payment of this tax, cancel tax certificates and ruin existing corruption schemes and tax platforms.
Yevgen Oliynykov of the Ministry for Economic Development and Trade commented on the concept: “State and business have to learn to trust each other that’s why the Concept is based on principles of mutual responsibility. We also have to make stealing from the state budget impossible, it is not about shadow economy but about a crime that under no circumstances should be legalized.”
