The Government to discuss the draft amendments to the Tax Code at the next meeting on Wednesday

10/3/16

The Cabinet of Ministers will discuss the draft Law of Ukraine “On the Amendments to the Tax Code of Ukraine” at its meeting on Wednesday. Once approved, the draft law will be passed to the Parliament.

The document was presented and discussed during the Government’s meeting on Monday chaired by Prime Minister Volodymyr Groysman. The meeting was attended by representatives of the Government, controlling authorities, MPs of Ukraine representing Parliamentary committees, businessmen, representatives of business associations and civil organizations.

The joint anti-corruption draft of tax amendments is aimed to make life simpler for business and to remove hurdles affecting business development and business activities. Thus, the draft law shall simplify the tax administration reducing the related costs and time consumption for business. One more task is to reduce manipulation opportunities for the SFS on business.

The key changes proposed in the draft law also include tax breaks for new businesses, transparent VAT refund via a single state register and transfer of databases from the SFS to the Ministry of Finance.

Opening the meeting, the Prime Minister said that the amendments to the tax regulations shall improve the business climate in Ukraine.

“We have been talking much about tax rates, but I think that it’s extremely important to create a system enabling business to develop rapidly. Making life easy for business is our key objective – we must elaborate and implement amendments to our tax law which will be able to change the situation”, the Prime Minister said.

Volodymyr Groysman pointed out that business and investment ”migrate” to places which offer equal rules for everyone, predictable business prospects as well as open, transparent and clear relations with the authorities regarding permits, fiscal issues and tax administration. “One of our most important objectives in this context is to set equal “rules of the game” for all businesses”, Volodymyr Groysman said.

The Prime Minister also stressed that the tax amendments must set incentives for the de-shadowing of the economy. Conservative calculations show that the volume of the shadow economy in Ukraine is equal to approximately 1 trillion hryvnas.

“We must create proper tools enabling us to drive resources out of the shadow and make them work for our country. Most important – we must use various tools, including the tax system, enable business to develop instead of subduing it, which, unfortunately, used to be the case”, Volodymyr Groysman said.

According to the Prime Minister, tax amendments should also stimulate economic growth and keep the balance of interests of business and the state. Also, making taxes simpler must go hand in hand with the responsible behavior of business.

When presenting the draft law, the Prime Minister pointed out that the proposed tax amendments will set proper conditions for business and improve the investment climate which are the pillars for the economic development of the country.

“Our joint package of anti-corruption tax amendments does not only remove ambiguities in the tax regulations – it is also a very important part of the SFS reform, since it actually eradicates opportunities for systemic corruption and abuse of office related to taxation”, Minister of Finance Oleksandr Danyliuk emphasized.

The participant of the meeting discussed the key points of the proposed amendments and expressed their critical remarks and proposals. All business associations and public experts expressed their support to the draft law. Earlier, the draft law was publicly supported by the US Chamber of Commerce, the All-Ukrainian Association of Small and Medium-Sized Business “Fortezya”, the European Business Association, the Association of Ukrainian Entrpereneurs (SUP), the Ukrainian Business Association, the Ukrainian Chamber of Commerce and Industry, the Council of the Business Ombudsman, the Ukrainian Union of Industry and Business, the civil platform “Taxes for Economic Freedom” (unites 17 associations), the Coalition “For the Liberal Tax Reform” (unites 15 associations) as well as by the public experts of the Reanimation Package of Reforms uniting various research centers and civil organizations.

The participants of the meeting mentioned the “unprecedented” openness of the Ministry of Finance in the elaboration of tax law amendments in the working groups.
The Prime Minister, in his turn, confirmed that the tax law amendments had been developed in an open and transparent way. Everyone could participate and send her/his proposals which were always subject to discussions in the working groups.

“The Ministry of Finance published the draft law text several times for a public discussion, arranged a number of meetings with business and collected additional proposals. As a result, amendments were elaborated which shall significantly simplify tax administration, solve a number of issues affecting business and – most important – eradicate systemic corruption”, Volodymyr Groysman said.

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