Taxes on OLX, Uber, and Kabanchik: Will the government profit from this, and what prices will rise first
12 June 16:16
ANALYSIS FROM 
The Verkhovna Rada of Ukraine has passed a landmark law that radically changes the rules of the game for everyone who earns income through online platforms. Popular marketplaces, taxi services, housing rental platforms, and freelance exchanges will be required to automatically report their users’ income data to the State Tax Service (STS). The new measure is intended to bring the online services and commerce market—which has largely remained “in the shadows”—into the open. What exactly will change for ordinary Ukrainians who sell items on OLX, drive for ride-hailing services, or do freelance work? "Komersant Ukrainian" took a closer look.
Who is subject to regulation, and who is off the hook?
Virtually all popular digital services are in the tax authority’s crosshairs. Among them:
- Marketplaces (online platforms for selling goods);
- Rental services (real estate, cars, etc.);
- Taxi and delivery services;
- Freelance marketplaces (searching for specialists for one-time or ongoing projects).
The law provides for a so-called “tax-free limit.” If your total income from selling goods or providing services through these platforms is up to €2,000 per year, there’s no need to worry—this money is tax-exempt. This will protect those who are simply selling their own used items or have a very small side hustle.
However, are the State Tax Service and the business community ready for such a step, and why might the actual amounts in the budget turn out to be significantly lower? Economist, Acting Director of the Institute of Applied Systems and Technologies, and architect of the Oblik-SaaS online accounting system, Danylo Monin, shared his perspective on the situation.
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Why the launch as late as 2028, and what challenges will the State Tax Service face?
According to the draft law, the first reports on the platform must be submitted by January 31, 2028, based on the results of 2027. Such a long preparatory period (about 1.5 years) is due to the enormous technical challenges facing both the government and the business community.
“In fact, the Ukrainian tax authority will need to develop from scratch a complex system for collecting and storing tax information that digital giants will provide regarding their active sellers and drivers. On the other hand, the platforms themselves must develop unique technical modules to export this data in accordance with the State Tax Service’s requirements,” explains Danylo Monin.
In addition to internal automation, the State Tax Service faces integration into an international data exchange system, as this involves interacting with the global offices of Uber or Airbnb. Setting up these gateways without glitches or data leaks is a challenge that cannot be solved in a few months.
A 10% tax break or “bypassing apps”: how will the market react?
If your income exceeds the €2,000 annual limit, everything earned above that amount will be taxed at the base rate of 10%. The government positions the 10% rate as a compromise and a favorable rate, since the standard personal income tax, combined with the military levy, is significantly higher. However, for many categories of citizens, this rate will prove economically absurd, Monin notes.
The expert emphasizes that Ukrainian legislation already offers significantly more advantageous alternatives that will push people toward registering as sole proprietors or into the shadow economy. Danilo Monin suggests the following options.
- For the service sector (taxis, cleaning, tutoring): It is easier to set up a Group 3 sole proprietorship. Paying a 5% single tax and a 1% military levy totals 6%, which is significantly more advantageous than paying 10% through the app.
- For selling goods: A 10% rate on turnover (revenue) is, according to the economist, a “wildly high rate.” With a low business margin, such a tax will simply “eat up” all net profit.
“If you sell goods with a 15% markup, then when switching to a Group 2 sole proprietorship, you first need to sell goods worth approximately 60,000 hryvnias to cover the fixed tax (which, due to the minimum wage increase, is currently about 4,500 UAH/month including social security contributions), and only then can you start making a profit. But this is still more profitable than losing 10% on every transaction,” emphasizes Danylo Monin.
He also points out that the platforms themselves (such as Uber or Kabanchik) charge a hefty commission for their services. As a result, a significant portion of drivers or rental providers will try to “bypass” the apps — they will offer customers to cancel the ride or booking in the system and pay in cash or by card for a discount.
At the same time, the main benefit for users is the elimination of unnecessary bureaucracy. You will no longer have to calculate taxes yourself or fill out complicated tax returns. Online services are becoming tax agents: they will independently and automatically calculate the tax from your income and transfer it to the budget.
14 billion to the budget: illusion or reality?
Danylo Monin is extremely skeptical about the Ministry of Finance’s hopes of bringing 14 billion hryvnias into the budget through the digitization of this tax. Attempts to forcibly pull the market out of the shadows amid a protracted war could backfire—the market will transform, shrink, or go completely underground. And there is a compelling socio-demographic reason for this.
“The problem is that a huge number of men who do not want to serve are surviving in the shadow economy today. Any verification via digital platforms involving the transfer of personal data to the tax authorities poses a huge risk for them. Therefore, these attempts to bring people out of the shadows will have a significant negative impact,” Monin notes.
Against the backdrop of the state’s overall financial revenues, such steps look like “scraping for pennies” in the pockets of an impoverished population.
“I am very skeptical about these 14 billion. Especially when Ukraine is set to receive 2.291 billion hryvnias in grants from the EU under the recently approved budget expansion. Despite receiving such a massive amount of money from Western partners, the state is still trying to dig as deep as possible into citizens’ pockets. This law on digital platforms is cut from the same cloth as the scandalous taxes on parcels,” says Monin
What will happen to prices?
It will be impossible to avoid price hikes in any case. The DAC7 law will only add fuel to the fire of inflation, but prices for taxis and rent are already creeping up due to other factors.
“Taxi fares and other service prices will rise even without the introduction of this bill, as fuel prices and excise taxes are constantly increasing, and wages are also rising,” emphasizes Danilo Monin.
According to Danilo Monin, the new tax will become “just another excuse to raise prices,” as businesses will pass on the additional 10% tax burden to the end consumer.
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