Plans for the reform of the simplified taxation system in Ukraine remain relevant. The government plans to significantly revise the conditions for individual entrepreneurs (PPOs) and increase tax rates. This is stated in reports of the Ministry of Finance of Ukraine on the state of implementation of the National Revenue Strategy for 2024.
According to the document, the reform of the simplified tax system (SST) is planned for the period after the completion of the measures provided for in subsection 4.2.3(b) of the National Revenue Strategy. This unit focuses on the implementation of measures to ensure the security of data use and access to information on the volume and movement of taxpayers’ funds in their bank accounts. It is also about the development of a security concept regarding the use of personalized and depersonalized information by tax authorities. However, as of 2024, this point has not yet been fulfilled.
The main directions of the reform of the simplified taxation system include the following changes:
- During the transitional three-year period, the rates of the single tax for legal entities of the third group will gradually increase to the level of the standard rate of income tax, which is currently 18%. After the end of this period, legal entities will be prohibited from being on the simplified taxation system.
- The second and third groups for FOPs will be combined, and tax rates will be differentiated. The minimum rate for trade activities will be 3%, and for a number of services – up to 17%.
- The list of activities for the first group will be revised. High-margin businesses will be excluded, and taxation will only be on actual income, eliminating flat rates.
- For payers of the combined second group, it will be mandatory to use settlement transaction registrars (SRS) or software SRS.
- The VAT registration threshold will apply to all VAT payers.
- For farms (individuals) in the fourth group, the tax base will be expanded.
- The rates of the single tax for producers of agricultural products (legal entities) will be gradually revised upwards to the level of the general income tax rate.
- The possibility of conducting activities without accounting and documentary confirmation of the origin of goods will be abolished.
Statistics of FOPs
As of January 1, 2025, the number of individual entrepreneurs working under the simplified taxation system amounted to 1,625,700 people, which is 52,500 more than the previous year. In terms of groups, the situation looks like this:
- The first group – 194.9 thousand. persons, which is 7.4% less than in 2023, with a share of 12% of the total number.
- The second group – 630.6 thousand. persons, which is 4.8% more, with a share of 38.8%.
- The third group – 800.2 thousand. persons, which is 4.9% more, with a share of 49.2%.
- The fourth group – 0.7 thousand. persons
Total revenues from the simplified taxation system as of January 1, 2025 amounted to more than 55.1 billion hryvnias, which is 17.1 billion more than last year.
These changes are aimed at improving the tax system, ensuring the fairness of taxation and reducing the risks of tax evasion.
