REUTERS
Supporting an initiative of the Ministry of Finance to introduce a new vehicle tax on all cars not older than five years will definitely discourage the Ukrainians from buying cars, said Oleh Nazarenko, head of the All-Ukrainian Association of Automobile Importers and Dealers.
"It seems that they [from the Finance Ministry] are pushing Ukrainian economy to its collapse. Imagine you have enough money and you buy a car. Then, you pay taxes every day - you buy fuel, there are [also] excise taxes. If this tax is imposed, it will discourage people from buying cars. Instead of buying a car and paying taxes, you would keep your money, so and it doesn't serve for benefit of our economy," he said.
According to Nazarenko, the Finance Ministry does has no effective mechanism for managing the vehicle tax, as luxury cat tax, introduced in January of this year, has brought little to no money to the budget.
In addition, managing the new vehicle tax requires additional personnel, which will eventually reduce tax revenues.
"Now we are negotiating with the parliamentary factions, doing our best to disrupt the adoption [of this bill]. We are trying to explain that people offering such inititatives have not a slightest idea about tax management," Nazarenko said.
As UNIAN reported earlier, on Monday, August 17, the Ministry of Finance submitted to Parliament a bill, which aims at simplifying and clarifying certain tax provisions, as well as introducing the principles of justice, for all entities. Specifically, it introduces a vehicle tax on cars not older than five years, and also an increased luxury car tax regarding owners of cars worth more than UAH 1 million.
Currently, the annual UAH 25,000 car tax is effective in Ukraine for luxury cars not older than five years, with 3l engine. This tax was introduced as part of the legislative amendments to the Tax Code, adopted by the Parliament in late 2014 having entered into force on January 1, 2015.