Odessa, January 5, 2015 – Inna Kravchuk, the head of the Business Council of Odessa, said at a briefing about tax reform in Ukraine and its relation to the country’s budget.
In Ukraine, the parliament adopted a budget for 2015. It would be impossible without the adoption of several laws, related to the reform of the tax system. Expert community and business assess changes in the tax system as ambiguous. Among them are as successful changes, and those that cause disagreement or simply misunderstanding.
Changes in taxation of residential property will affect many Ukrainians. Now the real estate tax will be imposed on owners of apartments whose area exceeds 60 sq. meters and private houses of over 120 sq. meters.
It would seem that everything is simple, but, in fact, such a step have defects. For example, the law does not take into account factors such as the area where there is a private house, and the type of apartment.
For example, a house in the village with area of over 120 square meters – this is not a luxury. And there is a difference between an apartment in Khrushchevka, where live generally pensioners, and apartments in new buildings. Rural large house – this is not a cottage on the outskirts of cities. There’s probably a few families of relatives living, rebuilt and expanded it for many years.
Similarly is with the apartment in Khrushchevka. If its area exceeds 60 square meters, the elderly, living on a pension, will be forced to pay more and also the real estate tax, despite the fact that the growth of social payments in the country is frozen. But they still have to find the money for more costly communal payments.
The rate of property tax is 2% of the minimum wage and it will be distributed to those parameters, which go beyond the established norms (60 sq.meters for apartments and 120 square meters for private houses).
Definitely hit the pockets of Ukrainians introduction of a tax on imports. All goods imported from abroad rise. Although this tax does not apply to oil, gasoline will rise in price too, due to the increase in excise duties on fuel. On average, 1-1,5 UAH.
Additional excise duty will be put on the sale of alcohol and tobacco products. A bottle of the cheapest vodka will rise in price on 2-3 UAH, a pack of cigarettes go up on 1-1,5 UAH.
Interesting tax is on securities and passive income. Its rate is 5 percent and 20 percent of the profits. The law was adopted explicitly into account the interests of oligarchs and directed against ordinary Ukrainians. Rate of 5 percent will apply to businesses paying VAT to the budget (such as a rule, belong to large businessmen). Other companies and individuals will pay 20%.
Still have to fork out to owners of new or nearly new cars with an engine capacity of 3 cubic meters, per year they will have to pay 25 thousand UAH.
The most absurd novelty of a new system of taxation is tax on pensions that exceed 3600 UAH per month. Anything above that amount will be taxed at 10%.
This is despite the fact that even in Eastern Europe, people who receive a monthly income of less than 500 $ per month are considered to be below the poverty line.
For small and medium-sized entrepreneurs there is good news. Those who pay a flat tax, will now do so to a lesser extent, because for a single tax payer at a rate of 5%, it will be reduced to 3% (if the payer pays the VAT), and from 10% to 7%, where an enterprise working on a single tax.
Another important aspect is the monitoring of local taxes. The powers of the authorities in the field grow strongly, which creates a reason for corruption. Therefore, it is important not to let the public officials on the ground exceed their authority.
With regard to the budget of the country as a whole, its revenue is overstated and not feasible. Therefore, it is possible that in the mid-year budget will be reviewed. So it is budgeted fall in GDP of 2-3% in 2015 seems too optimistic. The real situation is somewhat worse.