Minister of Finance Nathalie Jaresko presents compromise draft of tax reform

On December 8, Minister of Finance Nathalie Jaresko presented the compromise draft of the tax reform at the meeting of the National Council for Reforms which was elaborated on the basis of the Ministry’s proposal as well as proposals and remarks received from MPs, business and public.The topic of the 16th meeting of the National Council for Reforms was the tax reform. The meeting was chaired by President of Ukraine Petro Poroshenko and attended by Prime Minister Arseniy Yazenyuk and Chairman of the Verkhovna Rada Volodymyr Groysman.

Рresenting the compromised draft of the tax reform, Minister of Finance Nathalie Jaresko emphasized that the last four months had been extremely intensive in terms of the public discussion of the tax reform. However, the Ministry of Finance had managed to elaborate the responsible concept of the tax reform considering comments and wishes which are in line with the general philosophy of the reform and can be implemented without misbalancing the system of public finance.

«Just like the original proposal of the Ministry of Finance, the amended draft of the reform is based on the principles of responsibility, simplicity, fairness, effectiveness and systemic procedure. We firmly believe that only a reform based on such principles and values can give a strong impulse for the development of entrepreneurship, business, employment as well as contribute to the prosperity of the entire country», the Minister of Finance said in her speech.

According to Nathalie Jaresko, proposals made to the Tax Code include the following innovations: introduction of the PIT and corporate profit tax rate at 18% starting from next year and their reduction to 17% starting from 2017. It is also proposed to radically reduce the payroll tax by cutting it next year from approximately 41% to 20%. Other innovations include the implementation of a transition period for agricultural companies to switch to the general taxation system as well as a number of important amendments regarding tax administration like demilitarization of tax police, launch of electronic offices for tax payers, creation of a transparent system for the automatic VAT reimbursement etc.

«This compromise on the tax reform will enable us to react to the expectations of the society ann business in Ukraine regarding the fast reduction of the tax burden and at the same time help us create fair and transparent tax legislation and start removing all numerous distortions in the tax regulations. This will help restore the confidence of citizens in the tax system and thus let us hope that the Ukrainian economy will get out of the shadow», the Minister of Finance said.

The President of Ukraine and other participants of the meeting discussed and approved the compromise draft of the tax reform proposed by the Ministry of Finance. Next days the amended draft of the tax reform will be submitted to the Parliament.