Introduction of tax on withdrawn capital will help Ukrainian companies avoid problems with informal double taxation standards and reduce the level of corruption in the tax system. This was discussed on May 28 during a meeting between the experts of the Reanimation Package of Reforms and Martin Grote, a senior economist at the International Monetary Fund, a member of the IMF mission in Ukraine.
RPR experts, Volodymyr Dubrovskyi, Member of the CASE Ukraine Supervisory Board, Illia Neskhodovskyi, Director of the Institute for Socio-Economic Transformation, and Viacheslav Cherkashyn, Senior Tax Policy Analyst at the Institute for Socio-Economic Transformation, attended the event.
According to the experts, businesses in Ukraine currently face a number of problems, such as high taxes on salaried employees (unified social tax equal to 22%), difficulty in obtaining bank loans, and instability of the national currency.
RPR experts agreed with Martin Grote’s comment that it is a usual practice in most countries to set different tax rates for different industries and to launch audit procedures under certain circumstances, but noted that these aspects are inadmissible in corrupt countries.
So far, Ukrainian tax authorities have certain “targets” as to the amount of taxes that must be collected from entrepreneurs, and the introduction of tax on withdrawn capital can finally relieve the state of this archaic element, according to the RPR experts.