A number of major business associations, NGOs and think tanks in Ukraine are now working to prepare a package of proposals to qualitatively improve the tax system, which, in turn, should stimulate the economy and ensure GDP growth in the current year.
A new bill, as proposed by the business community, should provide for a radical reduction in all major fiscal rates, preserve the simplified tax system along with the settlement of controversial issues around it, maintain special rules of taxation for the agricultural sector, cancel advance payment of taxes, which is stipulated in the current Tax Code, and VAT accounts, etc.
Related debates go on as part of round table discussions and meetings of NGOs’ expert groups and other organizations. The Ukrainian League of Industrialists and Entrepreneurs and the Anti-Crisis Council of NGOs stress that the preparation of the package of the proposals should be completed in the first quarter of this year, so that the expert debates could shift to the parliamentary level in spring.
The implementation of the bill, which is being prepared, will not in general have a negative impact on budget revenues, representatives of the Ukrainian business community say, as its provisions are aimed at a reduction in the share of the shadow economy, a recovery in business activity, an increase in the investment attractiveness of Ukraine’s economy (primarily through stimulating the domestic investor), and the restoration of economic growth.
The reduction in the tax rates will be compensated by an increase in tax revenues thanks to the growth of production and sales of goods and services, invigoration of the domestic market (an increase in households’ purchasing capacity and the development of small-sized businesses), measures to bring the economy out of the shadows. Ukraine’s GDP is expected to grow by 17% as a result of these efforts.
What is more, a large-scale business forum has been scheduled for March 2016 to discuss the business and investment climate, tax reform, activation of the domestic market as well.
