Tax reform 10-10-10 : business opinion

03/ 10/ 2022

The Office of the President and the Ministry of Economy are currently working on a tax reform concept called 10-10-10. It envisages a reduction of the value-added tax to 10% (it is currently 20%), personal income tax to 10% (currently 18%), corporate income tax to 10% (currently 18%). At the same time, for the period of war, it is planned to double the rate of the military levy to 3%. Besides, it is proposed to cancel the payment of social security tax (currently 22% of the employees payroll fund), but leave it for FOPs that are on the single tax system. At the same time, it is proposed to strengthen responsibility for violations of tax legislation, and for the sake of compensators to cancel the exhaustive list of tax benefits, which will allow to additionally attract about 180 billion UAH to the budget. It is worth noting that according to an express survey conducted by the European Business Association after several meetings with Deputy Head of the Office of the President of Ukraine Rostyslav Shurma, business supports the concept behind the reform. For a long time, the community has been talking about the need to deshadow the economy and reduce the burden on the payroll fund, because, with such tax pressure, transparent business becomes completely uncompetitive compared to shadow business. Moreover, the idea of making the country attractive for investment, particularly in the context of taxes, making everything transparent, and removing shadow flows, certainly looks alluring. Anna Derevyanko. EBA Executive Director. Obviously, it is important to study all the details that should be presented in the draft law. Sure, the idea looks interesting. Nevertheless, the community will be able to present the final position by getting acquainted with the written concept in the form of a draft law – so that each industry can mathematically calculate the effects. After all, as you know, the Trojan horse may be hidden in the details, . At the same time, not only the large tax burden is a problem for the work and development of business in Ukraine. The issues of rule of law and corruption are even more urgent. Therefore, they also need due attention, in parallel with the tax reform, so that after changing the distribution of taxes, the whole system starts to work in a different way – honestly, transparently, and clearly.

The Office of the President and the Ministry of Economy are currently working on a tax reform concept called “10-10-10”. It envisages a reduction of the value-added tax to 10% (it is currently 20%), personal income tax to 10% (currently 18%), corporate income tax to 10% (currently 18%). At the same time, for the period of war, it is planned to double the rate of the military levy to 3%. Besides, it is proposed to cancel the payment of social security tax (currently 22% of the employee’s payroll fund), but leave it for FOPs that are on the single tax system.

At the same time, it is proposed to strengthen responsibility for violations of tax legislation, and for the sake of compensators to cancel the exhaustive list of tax benefits, which will allow to additionally attract about 180 billion UAH to the budget.

It is worth noting that according to an express survey conducted by the European Business Association after several meetings with Deputy Head of the Office of the President of Ukraine Rostyslav Shurma, business supports the concept behind the reform. For a long time, the community has been talking about the need to deshadow the economy and reduce the burden on the payroll fund, because, with such tax pressure, transparent business becomes completely uncompetitive compared to shadow business.
Moreover, the idea of making the country attractive for investment, particularly in the context of taxes, making everything transparent, and removing shadow flows, certainly looks alluring.

Anna Derevyanko EBA Executive Director

Obviously, it is important to study all the details that should be presented in the draft law. Sure, the idea looks interesting. Nevertheless, the community will be able to present the final position by getting acquainted with the written concept in the form of a draft law – so that each industry can mathematically calculate the effects. After all, as you know, the "Trojan horse" may be hidden in the details, .

At the same time, not only the large tax burden is a problem for the work and development of business in Ukraine. The issues of rule of law and corruption are even more urgent. Therefore, they also need due attention, in parallel with the tax reform, so that after changing the distribution of taxes, the whole system starts to work in a different way – honestly, transparently, and clearly.