On November 28, Ukrainian President Volodymyr Zelensky signed a law on tax increases. This is evidenced by the bill map №11416-d on the parliament’s website.
The new law aims to increase the country’s revenue and reduce the budget deficit. It includes changes to the tax code, introducing new taxes and increasing existing ones. The government hopes that these measures will help to stabilize the economy and improve the living standards of Ukrainian citizens.
One of the key changes is the introduction of a progressive income tax rate. Currently, the flat tax rate of 18% applies to all income levels. However, starting from January 2020, individuals with an annual income of more than 1.5 million hryvnias (around $60,000) will have to pay a higher tax rate of 20%. This change is expected to affect only the top 1% of the population.
Additionally, the law introduces a new tax on capital gains from the sale of securities and property. The rate for this tax will be 5% for individuals and 10% for legal entities. This measure aims to target wealthy individuals who often use loopholes in the tax system to avoid paying their fair share.
The government also plans to increase the excise tax on tobacco products, alcohol, and fuel. These taxes will be raised gradually over the next three years, with the aim of reducing consumption and increasing budget revenue.
The law also includes changes to the value-added tax (VAT) system. Currently, businesses can choose between two VAT regimes – a general rate of 20% or a simplified rate of 5%. The new law introduces a third option – a 7% rate for small and medium-sized businesses with an annual turnover of up to 5 million hryvnias (around $200,000). This measure aims to support small businesses and stimulate economic growth.
The government has faced criticism from some opposition parties and business associations, who argue that these tax increases will harm the economy and discourage investment. However, the government argues that these measures are necessary to reduce the budget deficit and ensure the country’s financial stability.
President Zelensky has defended the law, stating that it is a necessary step towards building a strong and prosperous Ukraine. He also emphasized that the new taxes will not affect the majority of the population and will only target the wealthiest individuals and businesses.
The law has already been approved by the parliament and will come into effect on January 1, 2020. The government hopes that these tax increases will bring in an additional 37 billion hryvnias (around $1.5 billion) in revenue, which will be used to fund social programs and infrastructure projects.
In conclusion, the new law on tax increases in Ukraine aims to improve the country’s financial situation and stimulate economic growth. While some may argue that these measures will have a negative impact, the government believes that they are necessary for the country’s development. President Zelensky’s decision to sign this law shows his commitment to building a stronger and more prosperous Ukraine for all its citizens.
