Tax hike law to be adopted by the Rada next week: what awaits Ukrainians
4 October 2024 16:20
The Verkhovna Rada Committee on Finance, Taxation and Customs Policy has supported the draft law on a historic tax increase No. 11416-d for the second reading in parliament, MP Yaroslav Zheleznyak said, "Komersant Ukrainian" reports.
Zheleznyak said that the document was supported by 19 MPs, three abstained and only one opposed.
The tax bill provides for
- an increase in the military tax from 1.5% to 5%;
- setting the military tax at 1% of the income of single tax payers of the third group of individual entrepreneurs;
- tax increases for groups 1 and 2 of the individual entrepreneurs;
- 50% tax on banks;
- increase in the MPZ for land;
- 25% income tax for financial companies;
- exemption of cashback from taxation;
- transition to monthly personal income tax reporting;
- increase in the rent for crushed stone extraction.
At the same time, the government refused to raise VAT.
“The government refused to postpone it to 1 November or partially replace it with a VAT increase,” Zheleznyak wrote.
According to him, the Rada will pass the law on tax hikes next week
“It will be considered in the parliament next week, signed in the second half of October, but some of the provisions will come into force retroactively, from 1 October,” Zheleznyak wrote.
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Details of the draft law No. 11416-d
On 17 September, the Verkhovna Rada of Ukraine adopted the draft law No. 11416-d as a basis. 241 MPs voted in favour.
The updated version of the draft law provides for:
1) an increase in the military tax from 1.5% to 5%
- establishment of the CPT in the amount of 1% of the income of single tax payers of the third group;
- establishing the CPT for individual entrepreneurs – single tax payers of groups I, II and IV at 10% of the minimum wage;
2) setting the corporate income tax rate for banks in 2024 at 50%;
3) setting the corporate income tax rate for non-bank financial institutions (except for insurers) at 25%;
4) improving the proposed model for determining the amount of advance corporate income tax payments for petrol stations;
5) change of the tax period from quarterly to monthly for reporting on income paid to individuals (for economic booking);
6) instructing the Cabinet of Ministers to develop a draft law amending the Budget Code of Ukraine to transfer military fees to a special fund of the state budget to be used for the needs of the security and defence sector.
Since the law will not be adopted in its entirety by October, the implementation will be retroactive to 1 October, Yaroslav Zheleznyak, Deputy Chairman of the relevant parliamentary committee, predicts.
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