Govt says no to excessively raising taxes until end of war
The Ukrainian government is not going to raise taxes until the end of the war with Russia, except for returning them to pre-war levels, prime minister Denys Shmyhal has said.
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Speaking on national television, Mr Shmyhal explained that on 1 July, some of the tax reductions introduced in the first months of Russia’s full-scale invasion, including for large businesses, were cancelled.
Among other changes, Ukraine returned to pre-war fuel taxation under pre-war rules and regulations, raising it back to 20 percent.
The VAT reduction to 7 percent, in place since the start of the full-scale Russian aggression, was intended to help fill the market in the face of the loss of supply chains and the refusal to import products from Russia and Belarus.
"We partially expect that the return of taxes to the pre-war level will take place through the adoption of the relevant law by the Verkhovna Rada [parliament] on 1 August," the prime minister said.
"We do not plan or forecast any other changes, except for a return to the pre-war level, until the end of the war and I am sure we will not allow it.
"The tax system will be stabilised at the level it was before the full-scale aggression."
Returning to some pre-war taxes is part of Ukraine's agreement with the International Monetary Fund under the latest Extended Fund Facility programme.
One of its benchmarks, supposed to have been fulfilled by 1 July, provides for the abolition of the 2-percent tax regime for sole proprietors (FOPs), the return of tax audits for businesses, and fines for non-use of cash registers (PTRs).
Since those provisions have caused resistance among MPs, leading to the bill passed only in the first reading so far, the IMF agreed to postpone the benchmark until 1 August.
