Danylo Hetmantsev, Chairman of the Tax Committee of the Verkhovna Rada, explained, why the tax on luxury items was excluded from the tax bill. He noted that taxation of transactions with jewelry, cars, and apartments was deemed ineffective for quickly replenishing the budget.
Hetmantsev stressed that such categories cause a lot of controversy. For example, why are cars considered a luxury, but fur products are not? Or why mobile communication, which has long become a common necessity, is considered a luxury? In his opinion, there will always be those who will be dissatisfied and those who will benefit from such taxes.
The second reason for exclusion was the unclear tax rates proposed by the Ministry of Finance. Hetmantsev pointed out that there was no clear reasoning why, for example, jewelry should be taxed at 30%, cars – 15%, and apartments – only 5%. “Why five and not twenty-five?” – he asks, emphasizing the lack of reasonable explanations.
The third argument is the insignificant fiscal effect. According to estimates, the tax on luxury goods could bring in only 3-4 billion hryvnias, which is not worth the risk of causing discontent among a large number of people. Hetmantsev noted that there are two main tools for significant and fair fundraising: the military levy and the value-added tax. Currently, they have chosen the path of increasing the military tax from 1.5% to 5%, but the deputy believes that it would be worthwhile to consider increasing both taxes.
