A significant increase in military duty is expected in Ukraine, which has caused a stir in the automobile market. The government initiative involves increasing the rate and expanding the scope of application of the fee, including the purchase of cars.
Military training of Ukraine
Government initiative
Last week the public learned about the government's plans to significantly increase military revenue. Officials came up with a proposal not only to raise the current rate for individuals from 1.5% to 5%, but also to expand the scope of its application.
New car tax
One of the key proposals is the introduction of a 15% military tax on the purchase of movable property, in particular, cars that are subject to the first state registration in Ukraine. If the Verkhovna Rada supports bill No. 11416, the purchase of a new car in a dealership and its first registration will be subject to an additional 15% fee on the cost of the vehicle.
Reaction of Ukrainians
These tax innovations caused a strong reaction among Ukrainians. Many people rushed to car dealerships to buy a car before the additional fee was introduced. According to Oleg Nazarenko, General Director of the All-Ukrainian Association of Automobile Importers and Dealers (VAAID), in a day and a half, buyers purchased all available cars in showrooms. People are keen to use their savings to buy cars, avoiding the additional 15% military levy.
Expert opinion
VAAID believes that government initiatives may have a negative impact on the industry. According to experts, the effect of introducing a military tax on the purchase of cars may be short-term and insignificant. After the tax increase, a sharp decline in sales is expected, which will lead to a decrease in budget revenues instead of an increase. A reduction in sales will also entail a reduction in current contributions (5%) to the Pension Fund. VAAID believes that it will take buyers a long time to get used to the 20% tax burden when purchasing a car.
Glossary
- VAAID - All-Ukrainian Association of Automobile Importers and Dealers, an organization representing the interests of the automotive industry business in Ukraine.
- Verkhovna Rada of Ukraine - the Verkhovna Rada of Ukraine, a unicameral parliament and the only legislative body of state power in Ukraine.
- Oleg Nazarenko is the General Director of VAAID, an expert in the automotive market of Ukraine.
- Military tax is a temporary tax introduced in Ukraine to finance and logistically support the defense of the state.
- The Pension Fund is the central executive body of Ukraine that implements state policy in the field of pension provision.
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Answers to questions
What changes are proposed regarding military training in Ukraine?
How did Ukrainians react to the news about a possible increase in military training?
What potential impacts do experts predict for the auto industry?
What is the total tax burden on car purchases after the new tax is introduced?
Which bill provides for changes in military levy?
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Discussion of the topic – Car rush: Ukrainians are buying cars en masse before the introduction of a new tax
Ukrainians are actively buying cars in response to a government initiative to increase the military levy to 15% on vehicle purchases.
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Olga
Wow, is it really true that all the car dealerships were empty over the weekend? 😱 I heard about this bill, but I didn’t think that the reaction would be so violent.
Hans
Yes, Olga, this is true! My friend works at a car dealership and says he hasn’t seen such a stir in a long time. People are afraid of this new tax and are buying everything. 🚗💨
Marie
I understand the government's desire to increase budget revenues, but 15% is too much! I'm afraid this could have the opposite effect and reduce sales in the long run. 🤔
Carlos
Marie, I agree with you. This doesn't seem like a very well thought out solution. I wonder how this will affect the used car market? Maybe people will start buying more used cars? 🚙
Giovanni
All this fuss about taxes is just ridiculous. Why do we need new cars at all? I’ve been driving my old one for 20 years and I don’t know grief. It would be better to do something useful than to chase fancy cars. 😒
Anna
Giovanni, not everyone is as conservative as you 😄 New cars are safety, comfort and environmental friendliness. But I agree that 15% is too much. Maybe you should think about a compromise rate? 🤝
Piotr
What if this leads to the growth of the gray market? People will start looking for ways to circumvent the tax, and as a result the budget may receive even less. We need to find a balance between replenishing the treasury and stimulating the economy. 💼
Olga
Interesting thoughts, guys! Piotr, you are right about the gray market - it is a real threat. I hope legislators will listen to the experts and find a more reasonable solution. In the meantime, it looks like I'll have to wait a little while buying a new car... 😅🚗