At the beginning of the full-scale Russian aggression, the authorities met the needs of business and introduced several tax incentives. In particular, in order to make it easier for businesses to survive during the war, sole proprietors received the opportunity not to pay ERUs, and for companies and sole proprietorships they introduced a preferential single tax rate of 2% of the income received. And although it was planned that the benefits would be valid until the end of martial law, and it was recently extended once again, the Verkhovna Rada is already planning to cancel the preferential tax regime at a rate of 2% of turnover.
According to the State Tax Service, by November, 50.8 thousand Ukrainian companies switched to preferential treatment, which is only 3.6% of the total number of legal entities in Ukraine. In April-October, these companies paid over UAH 4.6 billion in taxes to the budget. At the same time, this preferential treatment turned out to be more popular among FLPs. According to the same tax service, 252,000 sole proprietors (14.8% of the total) took advantage of the right to reduce the single tax from 5% to 2%, which is 5 times more than legal entities. The total amount of the single tax paid by FLP at a reduced rate of 2% amounted to almost UAH 3.9 billion.
So far, there are no exact calculations of how the benefit with the payment of a single tax at a rate of 2% has affected the state and the economy as a whole. However, the deputy head of the tax committee of the Verkhovna Rada, Yaroslav Zheleznyak, believes that due to the introduction of this norm, the state receives less than 500-700 million hryvnia every month. At the same time, about UAH 200 million of this amount are budget losses associated with the use of benefits by the gambling business.
Therefore, deputies are already talking about the abolition of preferential taxation. Moreover, the deputies do not plan to limit themselves to the gambling business. Most likely, the benefit will be removed for everyone, but at different times.
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“We are waiting for the government’s position, but there is a lot to say that the benefit will be canceled from mid-2023,” said Daniil Getmantsev, chairman of the Committee on Finance, Tax and Customs Policy.
Initially, the exemption will be canceled for the gambling business. The profile committee of the Verkhovna Rada has already supported the relevant bill in the second reading. Therefore, in the case of prompt voting and signing, the law may enter into force by the end of 2022.
For other companies and sole proprietorships, benefits will be phased out gradually. The deputies intend to develop a long transition period so that the business has time to prepare. Although there is not much time left until mid-2023 to call the transition period “long”.
Source: Economic Truth
