"Overhaul": tax reform may beat corruption, Jaresko says

“Ukraine has 97 different rates for our four key taxes - personal income, VAT, corporate & payroll tax (social security),” the minister wrote on Facebook.

According to Natalie Jaresko, the existing tax system is overly complex and inefficient, leading to corruption and fraud.

“Fighting corruption is our most important priority but without a simple and clear tax regime we leave ourselves open to abuse and ultimately unfairness for our citizens and businesses alike,” she said. “Our Ministry has proposed a complete overhaul of the existing system by eliminating as much subjectivity as possible with a single 20% rate and based on the principle of a low and broad-base flat tax that simplifies and provides clarity for all. Simple and clear rules that apply to all is one of the best ways of getting rid of corruption and restoring confidence in our system.”

Read alsoRada to consider 2016 draft budget only after IMF's green lightAs UNIAN reported earlier, the Cabinet started working on a tax reform and drafting a new edition of Urkaine’s Tax Code in April, 2015. Tax reform is one of the key steps the Ukrainian government is required to take by the country’s main creditor, the International Monetary Fund.

There are to main projects of tax reform at the moment: one presented by the Cabinet, and the other drafted by Parliament. Both versions stipulate easing tax rates. But the Cabinet’s project proposes gradual decline and the increase of budget deficit to UAH 60 billion. The parliament’s project is more liberal, providing for a sharp decrease of tax rates, which, as experts believe, may create a budget deficit reaching UAH 200 billion.