Ukraine is preparing for another increase in taxes on labor and entrepreneurship, which has caused a wave of indignation among businessmen and ordinary citizens. Economist Oleksiy Kushch argues that the new tax measures could have been less painful for the population if the government had resorted to unpopular but effective solutions, such as taxing excess profits of banks and luxury goods.
Which is better — 57 billion UAH or 30 billion UAH?
Looking at how to count.
The parliament wants to push through a new tax bill. Everything is the same as before: increasing the military levy from 1.5% to 5%. Plus a 1% levy for third-group individual entrepreneurs. And then there are the little things: levy on gas stations, etc.
But the battle for an additional 50% tax on bank profits is starting again. Something like a tax on “windfall profits” - such things were sometimes used in the West.
This tax could generate UAH 27 billion, almost as much as the increase in taxes on labor (military conscription) and entrepreneurship.
And if you look at it from another perspective, by increasing the tax on excess profits of banks, you can completely abandon additional taxes on salaries and small businesses.
But apparently not.
The NBU and the Ministry of Finance have categorically opposed the increase in taxes on bank excess profits.
Moreover, they threatened to include a clause on the impossibility of such taxation in the memorandum with the IMF (then this will be presented as a requirement of the fund itself - a well-known practice of our government officials to camouflage their negative decisions under IMF requirements).
Imagine the level of cynicism, this highest level of unprincipledness.
The country has no money, but there is excess bank profit, inflated by subsidies from the NBU in the amount of UAH 227 billion in interest on certificates of deposit during the war. So this profit cannot even be taxed at an increased rate.
The return on equity (ROE) in banks is currently over 30%, and the NBU and the Ministry of Finance believe that if it is reduced to 15-20%, banks will suffer greatly.
Do they think everyone is an idiot?
No one even thinks about other sources of budget funding: they look for money not where it is, but where it is easier to get it.
What real sources are we talking about?
For example, the introduction of a progressive income tax for individuals with high incomes (25% at a base rate of 18%).
Of course, we are not talking about the military. After all, even the NBU itself, in its analysis, noted the growth of the wealthy class in Ukraine during the war from 5% to 8%.
A progressive income tax would avoid imposing an increased military levy on the minimum wage for the poorest.
I am not talking about such tax reserves as increased VAT on luxury goods, reduced VAT refunds on raw material exports, and export duties on raw materials. In a raw material country, export duties bring in… UAH 500 million per year, or the equivalent of USD 12 million.
The reserves there are very large. Their use would make it possible to completely abandon the increase in taxes on the incomes of ordinary citizens.
But who needs them, these ordinary citizens?
The Ministry of Finance and the NBU care about banks' profits, the IMF listens to what the Ministry of Finance and the NBU have to say, and sanctifies what is said with its memoranda, which are more important than the Constitution for the heads of these departments.
Besides, it's much easier to extract taxes from ordinary citizens during salary payments, especially from state employees. No one even bothers with 5%.
From the world by a thread - to the rich shirt of Briony..
