The Ministry of Finance does not plan to increase VAT: the agency named an alternative
Ukrainian pensioners would suffer the most from the increase in value added tax.
The Ministry of Finance of Ukraine has made public the reasons why it was decided to refuse to increase the value added tax (VAT) to ensure additional financing of the security and defense sector in the amount of UAH 500 billion. Instead, the government plans to introduce a military levy on non-essential goods. About this reported press service of the Ministry of Finance.
According to the report, the increase in VAT could become an effective tool for increasing budget revenues due to the ease of its administration. However, this measure has significant negative consequences for all citizens, especially for vulnerable categories such as pensioners. There are 10.2 million pensioners in Ukraine, who would be most affected by the VAT increase.
The government offers an alternative to the VAT increase — the introduction of a military levy on goods that are not a priority for consumption. Such goods include:
- cars;
- real estate;
- Jewelry.
The purpose of this levy is to raise the necessary funds to finance the security and defense sector without causing significant harm to the most vulnerable sections of the population.
The Ministry of Finance also noted that cars imported by charitable and non-governmental organizations and handed over to the Armed Forces of Ukraine will not be subject to military duty. This decision is explained by the fact that such cars are not registered in the Service Centers of the Ministry of Internal Affairs, which allows to avoid additional financial burden on volunteers and benefactors who support the country’s defense capability.
