The Verkhovna Rada intends to amend the Tax Code of Ukraine to support culture, tourism and creative industries.
Some 273 MPs voted in favor of bill No. 3851 at first reading.
According to an explanatory note to the bill, the document proposes to introduce tax mechanisms to provide state support to the spheres of culture, tourism and creative industries in order to prevent their stagnation, preserve and create new jobs.
The bill, in particular, proposes not to tax corporate profits, income of individuals, and a single income tax in the form of a cultural grant.
According to the bill, a cultural grant means “targeted assistance in the form of funds or property, which are provided on a free and irrevocable basis at the expense of the national and/or local budgets, international technical assistance for the implementation of a project or a program in the fields of culture, tourism and creative industries.
In addition, in terms of value added tax, it is proposed not to tax operations on import into the customs territory of Ukraine (import of goods) that are part of the national cinematic heritage.
It is also proposed not to tax certain operations for the supply of national films until January 1, 2025, and from January 1, 2023 to January 1, 2025, not to tax operations on the supply of services for the demonstration, distribution and screening of national films and foreign films that are dubbed, voiced in the state language on the territory of Ukraine, provided that such films are adapted, in accordance with the legislation, in the Ukrainian language version for persons with visual and hearing impairments.
During his working visit to Spain, Minister of Foreign Affairs of Ukraine Dmytro Kuleba has discussed with Secretary General of the UN World Tourism Organization Zurab Pololikashvili the prospects for Ukraine’s interaction with the Organization, involving the organization’s mechanisms in the development of the tourism industry in Ukraine.
“They paid main attention to the consequences of the COVID-19 pandemic for the tourism industry, its adaptation to new realities. Kuleba noted that the pandemic has not only obvious negative consequences for tourism, but also unexpected new opportunities. In particular, in Ukraine, such circumstances gave impetus for domestic tourism, aroused people’s interest in traveling inside their own country,” the press service of the Ukrainian Foreign Ministry said on Friday morning.
Pololikashvili noted that now this trend is observed everywhere, and the organization sees in it new opportunities for the global development of domestic and rural tourism.
The head of the Ministry of Foreign Affairs of Ukraine proposed to hold an international tourism forum of the World Tourism Organization in Ukraine, dedicated, in particular, to the topic of domestic and green tourism in the countries of the world.
“I have no doubt that Ukraine will become a new territory on the map of world tourism, which foreigners will be happy to discover for themselves as something new. The development of domestic tourism is a priority of President Volodymyr Zelensky and the government of Ukraine. I want us to join forces on the WTO to achieve this goals,” said the minister.
According to Kuleba, it is worthwhile, without waiting for the end of the pandemic, to actively seek new forms and methods of tourism development, given the importance of the tourism industry for the world economy.
The Minister invited the Secretary General of the UN World Tourism Organization to pay a visit to Ukraine.
Representatives of the tourism industry have appealed to President of Ukraine Volodymyr Zelensky, the government and the profile committees of the Verkhovna Rada with the request to create an anti-crisis committee with the participation of tour operators and to facilitate the mirror opening of borders with other countries, the press service of the Ukrainian League of Industrialists and Entrepreneurs (ULIE) has said.
According to the appeal, the tour operators demand negotiations between the Foreign Ministry and the countries that have opened borders for other countries, excluding Ukraine, as well as the introduction of mirror and simultaneous opening of borders with them.
The representatives of the industry insist that inbound and outbound tourism should receive equal support from the state.
“Designate professionals who will understand the difference between inbound, outbound and domestic tourism. These are concepts that cannot be interchangeable. Why are anti-crisis steps today are taken in the format of replacing outbound tourism with inbound tourism? This is not a way out of the crisis for the industry, but only a substitution of concepts, which will lead to even greater decline,” the appeal states.
According to the tour operators, more than 250,000 people work in the industry, and during quarantine thousands lost their jobs. In addition, travel companies incur losses due to penalties for the return of paid and unused tours. At the same time, the industry representatives emphasized that they do not require financial subsidies or provision of jobs.
The appeal was prepared by representatives of the tourism industry together with the anti-crisis council of public organizations and the ULIE.
President of Ukraine Volodymyr Zelensky has called on international business to invest in Ukraine and presented a number of promising projects.
“We have a number of projects to which I, under my personal guarantees, the guarantees of protection, invite foreign businesses. These are energy, infrastructure, transparent land circulation,” he said at the 16th Annual Meeting of the Yalta European Strategy (YES) in Kyiv.
In particular, Zelensky presented a project on land irrigation in the southern regions of the country, an inter-university IT cluster in Kharkiv, a film production center in Kyiv, a new resort on the Black Sea coast in a completely new city, ski resorts in Slavske and Borzhava, the development of Khortytsia island, a large-scale entertainment park for guests from Eastern and Central Europe.
“This is not a complete list of reasons why we invite you to invest in Ukraine,” the president added.
Lviv City Council has set the rates of tourism fee at 0.2% to 0.5% of the minimum wage for Ukrainian and foreign tourists, depending on the cost of their accommodation. The rates will take effect on April 1, 2019.
According to the report on the website of Lviv City Council, the smallest rate of tourism fee is 0.2% of the minimum wage (UAH 8.4) and will be applied if payment for accommodation does not exceed UAH 350 per day.
If the cost of living is UAH 350-750 per day, the tourism fee will be 0.3% (UAH 12.5), UAH 750-1,200 per day some 0.4% of the minimum wage (UAH 16.7).
The rate for tourists who pay more than UAH 1,200/day for accommodation will be 0.5% of the minimum wage (UAH 20.86).
At the same time, Lviv City Council set equal tourism fee rates for Ukrainian and foreign tourists, the report says.
At the same time, it is noted that the rate of tourism fee for tourists living in the private sector is calculated on the basis of the cost of such property per day, regardless of the number of residents.
Budget receipts from tourism fee in Ukraine in 2018 increased by 29.2%, to UAH 907 million, and taking into account tax payments the tourism industry raised payments by 20.7% last year, to UAH 4.2 billion, the Ministry of Economic Development and Trade has reported.
“This indicates an increase in the volume of domestic tourism flows and the effectiveness of implementation of the decentralization reform, namely local fiscal discipline improvement,” the agency said.
The ministry added there were also qualitative changes in the structure of foreign tourist flow to Ukraine in 2018. According to the ministry’s press release, the State Border Service recorded an increase in the number of tourists from the countries not bordering Ukraine, particularly Europe: from Spain by 68% Britain by 47.3%, Lithuania by 23.4%, Italy by 15.4%, Germany by 13.3%, and France by 9.2%.
The number of tourists from India over the past year rose by 57.4%, China by 38.8%, Japan by 38.3%, Israel by 21.7%, and the United States by 19%, while cross-border traffic, on the contrary, declined, the ministry said. According to the authority, this was achieved thanks to visa liberalization, and an increased offer of direct and low-cost flights.