Poroshenko says tax on withdrawn assets to be effective "vaccine" against corruption

Ukrainian President Petro Poroshenko says the tax on withdrawn assets will be an effective "vaccine" against corruption.

"I propose that only withdrawn part [of assets] – the part of profit for consumption, which is not used for the expansion of production – be subject to taxation. This will be a very powerful injection for economic growth and an effective vaccine against corruption," the president said at a press conference on February 28.

Read alsoPoroshenko: Pace of Ukraine reform "impressive"In his words, the replacement of the corporate profit tax with the tax on withdrawn assets will help the country to eliminate corruption schemes in the administration of taxes.

The corporate profit tax is the only tax that gives the tax authorities much room for abuse of office when charging it, he said.

"It's not the law, but the mood and 'appetite' of an inspector that determine what can be attributed to production costs and what not... The simplicity of administration will deprive the controller of the opportunity to decide on what could be included into production costs, the structure of spending, technology of production and other issues which the inspector should not have any relation to," Poroshenko said.

He noted that the bill on the tax on withdrawn assets was ready to be tabled in parliament.

As UNIAN reported earlier, the Cabinet of Ministers in October 2017 backed the bill on imposing the tax on withdrawn assets and forwarded it to the National Reforms Council.

Ukraine's Minister of Finance Oleksandr Danyliuk says the bill stipulates that the tax base for enterprises will be dividends and incomes equal to dividends, such as royalties and interest. Dividends are proposed to be taxed at a rate of 15%, while payments equal to dividends at 20% per annum.