A quarter of surveyed entrepreneurs are preparing to close down their businesses due to old and new taxes
24 December 2024 11:48
27% of the 32,000 individual entrepreneurs surveyed plan to close in the near future. In particular, more than half of these businesses are shutting down due to a sharp increase in the tax burden. This is evidenced by a study by Opendatabot, "Komersant Ukrainian" reports.
Opendatabot conducted a large-scale survey of Ukrainian entrepreneurs to find out the plans of small and medium-sized businesses for the near future. The study involved 31,694 respondents who said they were working as freelancers.
According to the analysts, 27% or 8,621 of the surveyed entrepreneurs plan to close their businesses in the near future. 2,297 or 7% planned to close this year. Another 20%, or 6,324 participants, said they planned to cease operations next year.
The survey also showed that more than half of those planning to close – namely 62% – decided to close because of tax increases. Another 19% of entrepreneurs are shutting down due to business problems.
In December, 2 entrepreneurs closed down for every one open business. For comparison, a year ago the situation was completely opposite: 4 new entrepreneurs accounted for 1 closure.
It is worth noting that currently, due to a large-scale attack by pro-Russian hackers on state registries, closing a business is either very difficult or impossible.
Why Ukrainian fops are closing
According to an all-Ukrainian survey of individual entrepreneurs, businesses close because of:
- Taxes – 5,341 (62.0%);
- No business – 1,619 (18.8%);
- Decision of the manager – 161 (1.9%);
- Other – 1,268 (14.7%);
- Did not answer the question – 232 (2.7%).
The majority of the surveyed FOPs work in retail (24.6%), and another 21% work in IT.
Since the law on the introduction of the military tax for small and medium-sized businesses was signed, 2 new businesses have closed for every 1 new one. Thus, 24,497 entrepreneurs ceased operations between the time the President signed the law and December 17. During the same period, 2.2 times fewer new businesses were opened: 10 947. For comparison, in the same period last year, 4 new fops accounted for only 1 closed one.
It is worth noting that President of Ukraine Volodymyr Zelenskyy signed a law on tax increases. The law provides for an increase in the military tax on all income of Ukrainians from 1.5% to 5%.
Increased military tax
According to the new law, which was signed by the president last week, the fee is levied on the income of all individuals in Ukraine.
The increase will affect many transactions and operations: salaries, sick leave, dividends, cryptocurrency sales, royalties, income from the sale of property, if more than 1 transaction per year, royalties, severance pay, rental income, and charitable assistance.
Employers are obliged to accrue and pay the tax.
The funds received as a military fee are transferred directly to the state budget.
Who does not pay the military fee
According to the law, the military and employees of agencies belonging to the security forces, as well as all persons participating in the defense of Ukraine against Russian aggression, do not pay the military fee.
The military fee is not levied on the following income: maternity payments, inheritance and gifts from relatives of the first degree of kinship, sale of property (if 1 transaction per year), alimony, housing subsidies, and business trip compensation.
