The Association “Insurance Business” (ASB) opposes the increase of income tax, which is included in the draft law No. 11416 “On Amendments to the Tax Code of Ukraine and other laws of Ukraine on the peculiarities of taxation during martial law”. In the opinion of the ACB, which its representatives made public during the meeting of government and business representatives, the bill creates conditions for disproportionate pressure on bona fide businesses and employees. At the same time, the new type of turnover tax will complicate the already complicated administration of taxes and fees, creating new corruption risks.
In addition, the draft law lacks measures to combat the shadow economy and measures to improve the efficiency of the State Tax Service. Such factors will lead to discrimination of bona fide business and contribute to the growth of the shadow economy, the Association’s website says.
In addition, the developers of the bill do not take into account the negative consequences of its adoption, which will be in the reduction of business activity, which will lead to a decrease in the total taxable base, an increase in the risks of shadow economy and the introduction of various tax optimization schemes, which automatically raise the risks of corruption, according to the ASB.
Vyacheslav Chernyakhovsky, Director General of the Insurance Business Association, speaking at the meeting, noted that the insurance market already bears the burden of double taxation: 3% of gross insurance payments and 18% of income tax on a common basis.
“Our Association has conducted research on the basis of insurers’ reporting data for 2023, made public by the National Bank of Ukraine. We proved on figures that 3% tax on income means more than 35% on profit. This will have a particularly negative impact on those life insurance companies that are engaged in accumulative life insurance”, – warned Chernyakhovskyi.
According to him, if this is extrapolated to the economy as a whole, the introduction of an additional 1% tax on income in the form of a military levy corresponds to an increase of 12 percentage points in corporate income tax on the general taxation system, which would correspond to a general rate of over 30%.
Ukrainian business calls on the government and people’s deputies to take into account the proposals of the business community, to hold a professional discussion of alternatives to fill the budget and possible cuts in expenditures and to jointly work out a decision on the sources of budget revenues, the report says.
INCOME TAX, INSURANCE BUSINESS
