The Verkhovna Rada of Ukraine has passed a bill to significantly increase taxes, including increasing the military tax to 5% for most citizens. The bill has generated debate and may require further review due to legal issues.
Tax reform of Ukraine
Adoption of the bill
The Verkhovna Rada of Ukraine approved bill No. 11416-d, which provides for a significant change in the country’s tax system. 247 deputies voted for the document, taking into account the latest adjustments regarding the military levy.
Key changes
According to information provided by Yaroslav Zheleznyak, first deputy head of the Verkhovna Rada Committee on Tax and Customs Policy, some amendments were made during the discussion of the bill. In particular, for military personnel the previous military duty rate of 1.5% was retained.
Key new features include:
- Increase in military duty from 1.5% to 5% (except for military personnel);
- Introduction of a military tax for individual entrepreneurs (1% of income for individual entrepreneurs of group 3, 10% of the minimum salary for individual entrepreneurs of groups 1, 2 and 4);
- Increasing income tax for banks to 50% in 2024;
- Increasing the minimum tax liability on land plots;
- Establishment of 25% income tax for financial companies;
- Exemption of cashback from taxation;
- Transition to monthly filing of personal income tax reports;
- Increase in rent for crushed stone mining.
Legal problems
Certain difficulties arose when considering the bill. Amendment No. 988, which occupies a significant amount of text and constitutes “half the law,” did not receive the required number of votes. This may require a second vote to bring the document into proper form, as Yaroslav Zheleznyak noted.
In addition, the Main Legal Department of the Verkhovna Rada expressed the opinion that some provisions of draft law No. 11416-d do not comply with the Constitution of Ukraine, which may lead to additional discussions and revision of individual clauses.
Glossary
- Verkhovna Rada of Ukraine, the highest legislative body of the country
- FOP - Individual entrepreneur, form of registration of business activities in Ukraine
- Personal Income Tax - Personal Income Tax
- Yaroslav Zheleznyak - First Deputy Head of the Verkhovna Rada Committee on Tax and Customs Policy
- Cashback - Refund of part of the purchase price to the buyer's card
Links
- Yaroslav Zheleznyak's comments on the introduced changes
- Assumptions about the need for a repeat vote
- Assessment of the bill by the Main Legal Department of the Verkhovna Rada
Answers to questions
What major changes to the tax system of Ukraine were approved by the Verkhovna Rada?
How will military duty change for military personnel?
What changes await individual entrepreneurs (FSE)?
Are there any problems with the adopted bill?
What other tax changes are included in the bill?
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Discussion of the topic – Historic tax increase in Ukraine: the Verkhovna Rada adopted a law on a 5% military levy
The Verkhovna Rada of Ukraine adopted bill No. 11416-d, increasing the military tax to 5% for most citizens and introducing it for private entrepreneurs. The decision is being called a 'historic' tax hike in Ukraine.
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Liam
A 5% tax increase? This is a huge blow to the pockets of ordinary Ukrainians! 😡 How will people survive with such taxes?
Sophie
Liam, I understand your frustration, but the situation is complicated. Perhaps these funds will be used to support the army and restore the country. Although, of course, I would like to see a more detailed plan for the distribution of this money 🤔
Giovanni
Sophie, you're right, transparency is key. But I am glad that the previous rate was left for the military. This is fair considering their contribution to the defense of the country 🇺🇦
Hans
This is all just ridiculous. Just another pointless change that will only make life more difficult. It would be better to leave everything as it is and not fool people.
Amelie
Giovanni, I agree about the military. But increasing the bank profit tax to 50% is serious! 😮 I wonder how this will affect the banking sector?
Pablo
Amelie, I think the banks will find a way to compensate for the losses. I am more concerned about the increase in taxes for self-employed entrepreneurs. This could hit small businesses and startups 😕
Liam
Pablo, exactly! But small business is the basis of the economy. I hope the government has provided some support measures for entrepreneurs in this situation 🤞
Anna
And I was interested in the exemption of cashback from taxation. This is at least some plus for ordinary people. Maybe banks will now offer more profitable loyalty programs? 💳🤑