The Ministry of Finance welcomes the adoption of the anti-corruption draft law No. 5368 as a basis for the improvement of the tax system

The Ministry of Finance welcomes the adoption of the anti-corruption draft law No. 5368 as a basis for the improvement of the tax system and expects it to be adopted soon.

Why is it important?

Draft law No. 5368 is extremely important for business, since its regulations significantly simplify the business environment and create favorable conditions for business development. This additional legislation is an important part of the SFS reform, since it removes space for systemic tax-related corruption.

Anti-corruption draft law No. 5368 is a joint product of MPs, business, civil experts and the Ministry of Finance. The Ministry of Finance had initiated an open dialogue with business on the most rankling issues to contribute to their solution. From the very beginning, the Ministry of Finance met all parties and published presentations and working drafts for a public discussion; everyone was welcome to submit her/his proposals and prove their importance. Civil experts and business stressed more than once that the elaboration of the draft law was open in an “unprecedented way”.

The draft law has been already publicly supported by leading business and civil associations including the US Chamber of Commerce, the Ukrainian Association of Small and Medium-Sized Business “Fortetsya”, Business Council USA-Ukraine, the European Business Association, the Association of Ukrainian Entrepreneurs, the Ukrainian Business Association, the Ukrainian Chamber of Commerce and Industry, the Council of the Business Ombudsman, Civil Platform ”Taxes for Economic Freedom” (uniting 17 associations), Coalition “For the Liberal Tax Reform” (uniting 15 associations), Coalition “For the De-Shadowing of the Economy” (7 associations) as well as the group of civil experts of the Reanimation Package of Reforms uniting leading research centers and civil organizations.

What does it give?

Anti-corruption draft law No. 5368 is aimed to improve the quality of tax administration, i.e. the entire process of tax calculation and interaction between tax payers and the tax authority, as well as to solve the problems of business and – first and foremost – to tackle systemic corruption in the tax system.

“This draft law is not a cosmetic reform. It is a basis for the SFS reform and the solution of the most important problems of business. Now taxes will be paid easily and in a transparent way. Ukrainian business is waiting for this law and supporting it. That is why the support of the Parliament is so crucial for us”, Minister of Finance Oleksandr Danyliuk said.

Key amendments proposed in the draft law:

- implementation of the electronic office for taxpayers to improve the transparency of tax administration;
- implementation of a tax break for new businesses (for 5 years) to foster the development of small business;
- implementation of the Single Register for Tax Advice aimed to minimize the number of tax disputes;
- administration of all data bases by the Ministry of Finance aimed to reduce opportunities for the abuse of office;
- faster depreciation (2 years) for production equipment to stimulate investments;
- single public register of VAT refund applications aimed to increase the transparency of VAT refund;
- implementation of the mechanism to block the registration of tax bills meeting risk criteria – shall remove opportunities to manipulate VAT refund;
- suspension of fines and exemption from local taxes aimed to settle tax payments in the ATO zone. 

What’s next?

Anti-corruption draft law No. 5368 shall be adopted by the Parliament soon.