Parliament Supported Changes to Tax Legislation in the First Reading

Today the Parliament supported Law No 5600 "On Amendments to the Tax Code of Ukraine and some legislative acts of Ukraine to balance the budget revenues" in the first reading. 264 Members of Parliament supported the law.

The purpose of the law is to create a legal framework for:

• counteracting tax evasion schemes;
• formation of a transparent competitive environment;
• increase of efficiency of the use of economic resources of the country

This goal is expected to be achieved by:

• bringing the absolute values of the size of tax rates in line with the actual level of macroeconomic indicators;
• more effective payment of the fee for the use of mineral resources and the excise tax;
• combating tax frauds and the unrecorded use of land and the shadow turnover of agricultural products;
• preventing the abuse of budget refunds of VAT;
• increasing the completeness of tax payments and efficiency of tax debt administration.

To support citizens and businesses affected by the "coronacrisis", it is proposed to exempt from taxation of personal income tax, single tax, and the military fee citizens and entrepreneurs, who use state programs "Affordable Loans 5-7-9%" and "Affordable Mortgage".

"The president promised transparent and uniform taxation rules for everyone. Everyone who makes extra profits must pay taxes honestly. For ordinary citizens, small and medium businesses that work openly, the law is a resource, but large financial-industrial groups will have to revise their rules of the game and start paying fair taxes," Minister of Finance Sergii Marchenko said during the presentation of the law in the Parliament.

"Thanks to changes to the Tax Code, we will have the effective mechanisms to combat tax frauds and shadow turnover of agricultural products, as well as abuses of budget refunds of VAT. Those who used to avoid paying taxes will now have to pay. And the rate of taxation for the use of state-owned subsoil will depend on the price of resources in global markets and be calculated according to a formula tied exactly to market value, and not to the cost of mined minerals, as it is now.

Thus, concerning iron ore (62% Fe CFR), which today already costs more than USD 200 per ton. For example, about iron ore (62% Fe CFR) which today already costs $200 per ton, the state currently receives UAH 19.20 per ton for the low-metal content ore and UAH 204 per ton for the high-grade ore. After the changes, this figure will be UAH 507.80 / ton, "- commented Sergii Marchenko on the provisions of the law.