Sobolev Identifies Main Task for Government Regarding VAT for Businesses
Ukraine, during negotiations with the International Monetary Fund, has reached the highest European VAT threshold. The main task is to ensure equal playing fields for all entrepreneurs.
As reported by RBC-Ukraine, this was stated by the Minister of Economy, Environment, and Agriculture of Ukraine, Oleksiy Sobolev, during a speech in the Verkhovna Rada.
Read also: Individual entrepreneurs, parcels, and “tax on OLX”. The Ministry of Finance has unveiled a significant “tax bill.”
“Regarding our plans and how we communicate with individual entrepreneurs and small businesses, our task is simple. There must be equal rules for everyone. This is supported by all. We need to eliminate the scheme of activities that honest, small, and white businesses have nothing to do with,” Sobolev said.
At the same time, he noted that the mechanisms designed to eliminate these scheming activities should not complicate life for small businesses. In other words, no additional administration should be imposed on them.
“We have been actively communicating with the IMF. And you remember that initially, there was a proposal to set the threshold at 1 million hryvnias. Through our discussions, the proposal is now 4 million hryvnias, but overall, our position is simple: we need equal rules for everyone and straightforward administration for tax payments, especially for small and medium-sized businesses, which are already struggling,” the minister emphasized.
The Minister of Finance of Ukraine, Serhiy Marchenko, confirmed that this issue indeed lies in the realm of leveling the legal playing field for all businesses in Ukraine.
“And the Minister of Economy rightly pointed out that during the negotiations, we reached the highest European VAT threshold. This should be noted. Furthermore, we are simplifying all procedures for registering tax invoices, which will be automatic,” he added.
According to the minister, Ukraine is taking other steps that will allow small businesses to minimize administrative costs and create conditions where it will be beneficial for them to operate as VAT payers.
“Because if you understand the nature of VAT, and if you work with non-VAT payers, then no one wants to work with you. It is simply not advantageous for VAT payers to work with non-VAT payers. Therefore, we are creating conditions under which small businesses will gain additional opportunities,” Marchenko explained.
Tax Bill
Recall that in February, the International Monetary Fund lifted preliminary conditions for a new credit program for Ukraine amounting to $8.1 billion. This concerns requirements regarding VAT for individual entrepreneurs, duties on parcels, taxes for digital platforms, and military levies.
At the same time, Prime Minister of Ukraine Yulia Svyrydenko reported that all tax and customs changes that have been removed from the category of prior actions will become structural benchmarks that must be met for the next review of the program.
To this end, the bills regarding digital platforms, taxation of parcels, extending the 5% military levy, and introducing VAT for individual entrepreneurs will be combined into one large bill (Beautiful Tax Bill).
Regarding VAT for individual entrepreneurs, an agreement has been reached to raise the ceiling for its application from 1 to 4 million hryvnias. Thus, it will affect not 660,000 representatives of small businesses, but 257,000.
Last week, the Ministry of Finance of Ukraine published the so-called large “tax bill.”
The explanatory note states that the adoption of the bill will allow for the attraction of tax revenues to the state budget of Ukraine amounting to approximately 60 billion hryvnias annually and prevent losses in military levy revenues after the cessation or cancellation of martial law.
