investgazeta.net
The Finance Ministry of Ukraine has published the compromise draft document of the tax reform proposed at the meeting of the National Council of Reforms, envisaging personal income tax at the rate of 18% in 2016 and 17% in 2017, as reported on the website of the National Reform Council.
According to the document, tax social benefit for the calculation of personal income tax will amount to UAH 689 and will be included in the income amount that does not exceed the level of three minimum salaries. The ministry has proposed that pensions exceeding three minimum salaries will be subject to 15% tax. In addition, it is proposed to extend a 1.5% military tax.
The ministry also offers reduction of the single social security tax from 41% to 20%.
The document also envisages that the value added tax (VAT) be maintained at the 20% for domestic transactions, 0% for foreign transactions and 7% for the pharmaceutical industry. A one-year transition period under VAT payments for agricultural producers is also offered.
"The one year transition period regarding the special regime of VAT payments for agricultural producers stipulates 75% [of tax] to be paid to the budget, with 25% remaining in the taxpayers' special investment accounts for future use," according to the report.
At the same time, the Finance Ministry proposes increasing the limit threshold for registration of VAT-payers up to UAH 2 million.
As UNIAN reported earlier, the tax reform is one of the key conditions for fulfillment of obligations by Ukraine under the IMF's Extended Fund Facility Program approved in March 2015.
There were two draft documents of the tax reform in Ukraine, one document developed by the Finance Ministry, and another draft prepared by the Parliamentary Committee.
The Finance Ministry proposed introducing a flat rate for key taxes – value added tax, personal income tax, corporate income tax, single social security tax – at the level of 20% each.
The Verkhovna Rada Committee on Taxation and Customs Policy proposed a reduction in the basic income tax rate to 15% from the current 18%, and the decrease of personal income tax to 10% from the current rate of 15% and 20%, depending on the amount of income.
The Verkhovna Rada Committee insisted on the adoption of its tax reform draft, pointing to a failure to reach compromise with the Finance Ministry on this issue.