The Verkhovna Rada did not vote for a tax increase

The Verkhovna Rada of Ukraine was unable to gather a sufficient number of votes for the adoption in the first reading of draft law No. 11416-d, which provided for an increase in taxes. As People's Deputy Yaroslav Zheleznyak reported in his Telegram channel, the draft law was supported by only 224 deputies, which is 2 votes less than necessary for a decision.

Tax increase bill: details of the failure

The draft law, which provided for an increase in taxes by 30 billion hryvnias in 2024, was aimed at repeating the first reading after a failed vote. According to Zheleznyak, the government aimed to increase budget revenues, which this year will amount to only 30 billion hryvnias out of the planned 125 billion, and for 2024 they predicted an increase to 127 billion hryvnias from the required 340 billion.

Planned changes in taxation: what was expected

For the first time since the start of Russia's full-scale invasion of Ukraine, the government has proposed a tax increase. This decision was motivated by the need to increase state budget revenues, in particular, to finance military needs. The plans included an increase in the rate of military tax from 1.5% to 5%, as well as the introduction of this tax for individual entrepreneurs (PPOs). For taxpayers of the uniform tax of the III group, the military levy was supposed to be 1% of the income, and for the FOPs of the I, II and IV groups - 10% of the minimum salary.

Why did the draft law not pass?

The failure of the vote points to the lack of consensus among people's deputies regarding the necessity and expediency of such a significant increase in taxes in the conditions of war and economic instability. Some of the deputies expressed concern that the increase in the tax burden on businesses and citizens could negatively affect economic activity and the general situation of Ukrainians.

What's next?

Sending the draft law for a second first reading means that the government and parliament will continue discussions and possibly make adjustments to the proposed changes. However, given the current level of support, reaching the required number of votes remains in question. It is obvious that before the re-voting, it will be necessary to hold additional consultations and find a compromise among the deputies.

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