Ukraine may cancel pension tax on currency purchases from November

"The Finance Ministry's [initial] position was not to do so [cancel the tax], as it would reduce budget revenues. But we have supported [the cancellation], because we understand that this step aims at eliminating black market turnover. It [the cancellation] may happen, if I'm not mistaken, in November," Danylyuk told Channel 3S.TV.

The cancellation of the tax is stipulated in a new memorandum with the International Monetary Fund (IMF), which has not been published yet. The minister confirmed that the abolition of the Pension Fund fee was discussed when drafting the document.

The pension tax on foreign currency purchases is still foreseen in the current wording of the draft national budget for 2017, the minister said, noting that there is enough time to update the document.

As UNIAN reported earlier, the Cabinet of Ministers proposed that the parliament should maintain the Pension Fund fee on forex operations in 2017. According to the annexes to draft law No. 5000 on the state budget of Ukraine for 2017, the government estimates that budget revenues from operations on purchase of foreign currency in cash will amount to UAH 260.586 million.

Read alsoExperts estimate currency black market in Ukraine at $1 bln per monthEarlier, the National Bank of Ukraine repeatedly stated that the abolition of the pension tax on foreign currency purchase would reduce turnover on the shadow market in Ukraine, which is estimated by experts at $1 billion monthly.

The mandatory pension tax on purchases of foreign currency in cash and non-cash forms at a rate of 0.5% was introduced for legal entities and individuals in 2014.

In early 2015, the Law of Ukraine on amendments to the Tax Code of Ukraine and some legislative acts of Ukraine on tax reform raised the fee to 2%. Legal entities and non-cash currency purchases were exempt from the tax.