Main points
- The Cabinet of Ministers will submit to the Verkhovna Rada a draft law on taxes, which includes the introduction of VAT for individual entrepreneurs and other changes necessary to receive financing from the IMF.
- The new law may lead to the closure of individual entrepreneurs due to additional costs and higher prices for goods.
New tax bill / Photo by Pexels
The government is preparing changes to the tax system that Ukraine must adopt in order to receive financial support from the IMF. However, not everyone supports the provisions of the new law, which will particularly affect the work of individual entrepreneurs and could lead to mass business closures.
When will the new tax law be passed?
RBC-Ukraine reports on what updates the law will bring and how it will affect business.
The publication's source in the government confirms that the Cabinet of Ministers will submit a tax law to the Verkhovna Rada in the coming days .
Please note! The project contains changes that Ukraine must adopt in order to receive financing (loan) from the IMF.
It is known that the law will combine the following provisions:
- introduction of VAT for individual entrepreneurs;
- taxation of internet platforms;
- duties on all parcels from abroad;
- continuation of military conscription even after the war.
What is known about the draft law and its implications for business?
As part of the IMF financing, Ukraine must meet a number of requirements in order to receive the funds. This time, it is a loan of $8.1 billion.
Note: After Hungary and Slovakia blocked 90 billion euros in EU funding, IMF assistance is a key source of support for Ukraine's economy.
At the same time, the provisions of the new law are causing discussion among Ukrainians. Most of all, it concerns VAT for businesses. Among the predicted consequences are higher prices for goods for consumers, and additional costs for entrepreneurs themselves. As a result, about a third of individual entrepreneurs may close, unable to withstand the load.
At the same time, Yaroslav Zheleznyak previously wrote that the IMF's assessment is not realistic for Ukrainian conditions. Thus, possible taxes for individual entrepreneurs will bring the state 20 billion hryvnias.
The projected revenue from such a story will be as much as 20 billion hryvnias (I'm sure it's less). And for just one program to issue 1,500 hryvnias, our government is already handing out 19.5 billion,
– noted Zheleznyak.
He added that if the law is adopted, it should fully come into effect on January 1, 2027. It turns out that the 2026 period should become the so-called transitional period. However, the problem is that the system is unlikely to withstand the load.
After all, the new type of taxes will affect about 252 thousand individual entrepreneurs. And before you start working according to the new rules, you need to educate people.
The system will collapse and people will have to be taught for a long time,
– added Zheleznyak.
In particular, lawyer Bohdan Yankiv said on his channel that VAT for individual entrepreneurs will affect about 40% of all entrepreneurs in Ukraine.
What else do you need to know about doing business in Ukraine?
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An important point is the official registration of business employees. In Ukraine, unofficial work for an entrepreneur is punishable by perhaps the largest fine. In particular, if a worker works without an employment contract, the owner of the individual entrepreneur will have to pay a fine of 86,470 hryvnias for him.
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In particular, for some repeated violations, the amount of the fine for an entrepreneur is 30 minimum wages, or 259,410 hryvnias.
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And to open your own business or individual entrepreneur, you only need to make a few clicks in Diya. Currently, the service is as simplified as possible and available online. First, you need to choose a taxation system, then – individual income tax rates. Then submit an application, fill out the form and certify everything with an electronic signature.