Recent changes in the draft law on tax increases, which is being actively discussed in the Verkhovna Rada, caused a significant response in society. The main news is the planned increase in the military tax rate from 1.5% to 5%, which will undoubtedly affect every citizen of Ukraine. Although some taxes were excluded from the draft, other changes, including those related to the military levy, remain in place and have far-reaching consequences. Experts and politicians talk about what actually awaits Ukrainians after the approval of the new law.
Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev reported, that the finalized government bill on tax increases has undergone significant changes, and the Verkhovna Rada will consider it at the beginning of September. According to Hetmantsev, the document does not provide for an increase in VAT and luxury tax, and the 1% turnover tax was also excluded.
However, many are not satisfied with these changes. Thus, Dmytro Oleksiyenko, secretary of the Public Council at the Ministry of Finance of Ukraine, criticized the parliamentarians, saying:
“Individuals have to suffer. There will be no restart of the tax system, which was talked about”, – wrote he is on facebook.
Dmytro Oleksienko also published a list of taxes that will still be increased:
- increasing the military tax rate from 1.5% to 5%;
- establishing a military levy for the FOP of the first and second groups in the amount of 10% of the MZP;
- establishing a military levy in the amount of 1% for the III group of the unified tax;
- establishment of monthly advance payments for gas stations;
- setting the income tax rate for banks at 50% for 2024;
- increase in the income tax rate for financial companies to 25%;
- monthly reporting on personal income tax.
“This is all forever, without reference to martial law.
How was it in 2019…
“We will adopt a strategy of gradual reduction of the single social contribution
…
At the legislative level, we guarantee the immutability of current tax conditions for small business entities – natural persons.” – he summarized.
People’s Deputy of Ukraine, member of the Committee on Finance, Tax and Customs Policy Nina Yuzhanina, also commented Facebook’s upcoming tax changes. She reported that this Thursday the changes will be brought before the tax committee. Among the norms that were “refused/killed/postponed”, she included:
- for legal entities (enterprise income tax payers and single tax payers of the third and fourth groups) a military levy in the amount of 1% of income;
- 5% military levy on the purchase of bank metals;
- 30% military levy on the sale of jewelry;
- 15% military levy when buying a new car (except in cases of providing for persons with disabilities);
- 5% military levy when selling real estate (for individuals who sold one object per year);
- 5% military levy on mobile services;
- VAT settlement on all shipments from outside Ukraine, except for shipments from individuals to individuals, the total invoice value of which does not exceed 45 euros;
- a specific rate of excise tax on waters, including mineral and carbonated waters, with added sugar or other sweetening or flavoring substances, in the amount of 0.1 EUR per liter.
At the same time, Yuzhanina reported on the new norms that were added to the draft law:
- taxing the profit of financial institutions (except insurers) at a rate of 25% instead of the current 18%;
- introduction of monthly instead of quarterly reporting on personal income tax;
- the introduction of a 50% profit rate for banks in 2024 (as in 2023, although the current rate for banks is 25%).
She also noted that an advance payment of income tax will be paid for each fuel retail location:
- 60 thousand hryvnias when selling one or more types of fuel – motor gasoline, heavy distillates, liquefied gas (80 thousand hryvnias – when selling also alcohol and tobacco products);
- 30,000 hryvnias for the sale of liquefied gas only (40,000 hryvnias for the sale of alcohol and tobacco products as well).
“Yes, despite all the announcements/rumors, there is no mention of an increase in VAT (for now). But what will affect all citizens — an increase in the military levy rate from 1.5 to 5% — remains in the final draft of the law.
And the most important thing is that the changes in the part of the military collection are not planned for a year and not even until the termination or abolition of martial law, but “temporarily, until the decision of the Verkhovna Rada of Ukraine on the completion of the reform of the Armed Forces of Ukraine comes into force.” That is, forever. It is not yet known what resources these changes will bring to the state budget.” – emphasized Nina Yuzhanina.
