Businesses downgraded their assessment of the tax system in 2024, according to an EBA survey

20/ 12/ 2024

The integral assessment of the Tax Index has decreased to 2.64 points out of 5 and continues to remain in the negative zone (2.85 points in 2023). These are the findings of the new wave of the Tax Index survey conducted in 2024 by the European Business Association and EY in Ukraine. View the presentation Overall, 59% of tax experts rated the current tax regime in Ukraine as satisfactory. However, 36% believe it hinders business development and investment attraction, while only 5% consider it to foster their business growth. As in previous years, the lowest score among the factors influencing the index calculation was given to the quality of tax legislation—2.46 points (compared to 2.63 in 2023). Half of the respondents (52%) consider it satisfactory. At the same time, the share of experts who view tax legislation as poor increased from 39% to 43%, while those who consider it good dropped from 9% to the current 5%. Respondents identified frequent changes, contradictions, ambiguous provisions, and complexity as having the most negative impact on the quality of legislation. Forty-four percent of respondents find the tax administration and reporting process burdensome. This factor scored 2.62 points this year. Meanwhile, 41% rate this procedure as satisfactory, and only 15% find it easy (compared to 17% in 2023). Respondents frequently complained about the time spent preparing tax reports and making payments, the rushed implementation of new rules with insufficient adaptation time, and their lack of clarity. It is worth noting that these negative factors affecting the reporting experience have remained unchanged over recent years. The assessment of the quality of tax services also declined—from 3.03 last year to 2.79 points this year. Only 20% of respondents are satisfied with the quality of tax services (compared to 31% in 2023), while 37% are dissatisfied (up from 21% in 2023). The remaining 43% rate the quality of tax services as satisfactory. According to 31% of respondents, contacting the tax service was easy (compared to 46% last year), while 25% found it difficult. Among the surveyed companies, only 11% had their issues resolved satisfactorily, while 70% reported partial resolution. Participants noted increased fiscal pressure on businesses compared to the previous year. Among the index components, the fiscal pressure component showed the most significant decline, although it remains relatively high compared to other components. Its score dropped from 3.07 to 2.7 points. Only 7% of respondents reported no fiscal pressure on their company in 2024, while 14% felt minimal pressure. In contrast, 41% reported significant fiscal pressure, and 38% described it as moderate. Traditionally, businesses highlight unjustified interpretations of tax legislation by regulatory authorities as a major issue, with 78% of respondents reporting this. Complaints about unreasonable information requests (64%) and artificial blocking of tax invoices (30%) also increased significantly. Tax audits were reported by 33% of the surveyed companies. Natalia Artemchuk. Manager of the Tax and Customs Committees of the European Business Association. Unfortunately, the tax system′s rating has only reached a neutral level once—in 2021. In all other years, the research has reflected negative assessments by businesses regarding the tax environment. The main issues remain the quality of tax legislation and the complexity of administration. We believe that addressing these challenges is within the capacity of the relevant government bodies and should become their priority. Businesses and the public are ready to support this effort. For reference: The European Business Association’s Tax Index study has been conducted since 2011. The index consists of four equally weighted components: the quality of tax legislation, the burden/ease of tax administration, fiscal pressure, and the quality of tax services. Eighty-one tax and finance experts from the EBA’s member companies participated in the current survey, conducted from November 25 to December 11. EY in Ukraine is the survey partner for 2024.

View the presentation

Overall, 59% of tax experts rated the current tax regime in Ukraine as satisfactory. However, 36% believe it hinders business development and investment attraction, while only 5% consider it to foster their business growth.

As in previous years, the lowest score among the factors influencing the index calculation was given to the quality of tax legislation—2.46 points (compared to 2.63 in 2023). Half of the respondents (52%) consider it satisfactory. At the same time, the share of experts who view tax legislation as poor increased from 39% to 43%, while those who consider it good dropped from 9% to the current 5%. Respondents identified frequent changes, contradictions, ambiguous provisions, and complexity as having the most negative impact on the quality of legislation.

Forty-four percent of respondents find the tax administration and reporting process burdensome. This factor scored 2.62 points this year. Meanwhile, 41% rate this procedure as satisfactory, and only 15% find it easy (compared to 17% in 2023).

Respondents frequently complained about the time spent preparing tax reports and making payments, the rushed implementation of new rules with insufficient adaptation time, and their lack of clarity. It is worth noting that these negative factors affecting the reporting experience have remained unchanged over recent years.

The assessment of the quality of tax services also declined—from 3.03 last year to 2.79 points this year. Only 20% of respondents are satisfied with the quality of tax services (compared to 31% in 2023), while 37% are dissatisfied (up from 21% in 2023). The remaining 43% rate the quality of tax services as satisfactory.

According to 31% of respondents, contacting the tax service was easy (compared to 46% last year), while 25% found it difficult. Among the surveyed companies, only 11% had their issues resolved satisfactorily, while 70% reported partial resolution.

Participants noted increased fiscal pressure on businesses compared to the previous year. Among the index components, the fiscal pressure component showed the most significant decline, although it remains relatively high compared to other components. Its score dropped from 3.07 to 2.7 points. Only 7% of respondents reported no fiscal pressure on their company in 2024, while 14% felt minimal pressure. In contrast, 41% reported significant fiscal pressure, and 38% described it as moderate.

Traditionally, businesses highlight unjustified interpretations of tax legislation by regulatory authorities as a major issue, with 78% of respondents reporting this. Complaints about unreasonable information requests (64%) and artificial blocking of tax invoices (30%) also increased significantly. Tax audits were reported by 33% of the surveyed companies.

Natalia Artemchuk Manager of the Tax and Customs Committees of the European Business Association

Unfortunately, the tax system′s rating has only reached a neutral level once—in 2021. In all other years, the research has reflected negative assessments by businesses regarding the tax environment. The main issues remain the quality of tax legislation and the complexity of administration. We believe that addressing these challenges is within the capacity of the relevant government bodies and should become their priority. Businesses and the public are ready to support this effort.

For reference:

The European Business Association’s “Tax Index” study has been conducted since 2011.

The index consists of four equally weighted components: the quality of tax legislation, the burden/ease of tax administration, fiscal pressure, and the quality of tax services.

Eighty-one tax and finance experts from the EBA’s member companies participated in the current survey, conducted from November 25 to December 11. EY in Ukraine is the survey partner for 2024.