Tax changes introduced in Ukraine

Editorial Team Business

The amendments to the Tax Code halved single social security tax, abolished additional import duty, reduced tax rate for companies that honestly produce natural gas and increase our energy independence, emphasised Prime Minister of Ukraine Arseniy Yatsenyuk in Ten Minutes on Sunday, 27 December.

Arseniy Yatsenyuk stressed that single social security tax was halved from 41% to 22%. It means that, for example, if salary makes up UAH 4 500 the employer will be able to save UAH 900.

He pointed out the Government took a liability that despite the reduction of the tax, the Pension Fund would receive its funds. The State Budget will provide additional UAH100 billion to the Fund, as the smaller single social tax is, the less income to the Pension Fund. “As the state must, on the one hand, encourage entrepreneurs, on the other, – ensure full payment of pensions. And we will do this,” highlighted the Prime Minister.

Arseniy Yatsenyuk appealed to entrepreneurs: “The radical reform of single social security tax needs your understanding, your responsibility and your position. We halved single social security tax, this gave an additional resource. As a result, I ask each Ukrainian businessman to pull out of the shadows, stop paying salaries in envelopes.”

“You got the additional resource for developing your own business and the increase of real salaries for each employee. The tax reduced by half gives business an opportunity to develop their business and pay more to their employees. So I count on reciprocity. Only mutual trust and mutual responsibility will enable us to further build up a stable Ukrainian economy,” the Prime Minister emphasised.

He stressed that mutual trust must be built between the employer and the fiscal service authorities as well. That is why the Government has begun a wide-ranging reform of the State Fiscal Service: “This is the reduction in both the number of employees and the number of units of the State Fiscal Service. This is the reduction in the number of inspections and the main thing – the change of reimbursement order of value added tax.”

The Prime Minister pointed out that the manual mode would be lifted, just transparent and open approach to the refund of value added tax for all businesses.

He added that it was necessary to further work on amendments to the state budget and on a new version of the Tax Code as it was a process of constant reform and constant change.

In addition, he highlighted that additional import duty was canceled: “This means that the import price will also go down.”

“Moreover, we’ve dramatically changed the royalty policy during the natural gas extraction. We halved the tax rate for companies that honestly and transparently produce gas and increase our energy independence. Our goal is to make Ukraine fully energy independent within 10 years. And our tax policy is aimed at achieving this,” Arseniy Yatsenyuk underlined.