The National Revenue Strategy provides for a review of the simplified taxation system with the aim of introducing differentiated taxes for individual entrepreneurs. Deputy Minister of Finance Svitlana Vorobey reported that the Ministry of Finance took as a basis the Polish experience of taxation of small and medium-sized businesses, where a system with different rates from 2 to 20% operates, depending on the situation in the economy.
It is noted that the highest rates will apply to “salaried” individual entrepreneurs, that is, those used to replace labor relations with civil law or relations with individual entrepreneurs. According to Vorobey, this is aimed at creating equal conditions for competition and supporting employment with employees.
The Deputy Minister of Finance of Ukraine added that specific rates have not yet been determined, and their introduction involves a broad discussion with business representatives as part of a public process.
According to the National Revenue Strategy approved by the Cabinet of Ministers, the simplified taxation system is to be reformed by restricting its application to legal entities, introducing safeguards to prevent abuse, raising the threshold for VAT registration, and increasing effective tax rates to the level of the general taxation regime. The introduction of these changes will contribute to ensuring stable tax revenues, amounting to approximately 0.9% of GDP, according to the Ministry of Finance, in the period from 2020 to 2022.
