Oleksiy Lyubchenko: It is not tax rates that are crucial but their administration

It is necessary to align the tax landscape and create equal conditions for paying taxes. This was stated by Chairman of the State Tax Service of Ukraine Oleksiy Lyubchenko during the VIII International Tax Forum – 2021.

According to him, it is, first of all, about taxation of those structures in respect of which the preferential conditions were created for doing business during 30 years of the state’s existence.

Group IV of the simplified taxation system, specifically employs more than 52 business entities with a billion of income that carry out activities in the crop and livestock production spheres. At the same time, they pay a fixed single tax and pay the value added tax tens of times less.

“Simplified system is, first of all, support for small and medium-sized business. Billionaires in this classification are the least likely to pay taxes. They have learned to evade taxation through various mechanisms, from withdrawals, preferential regimes, understatement of income tax, etc. At the same time, small business pays 10 times more, being on the same simplified taxation system. This is a distortion of the tax landscape” – stated Oleksiy Lyubchenko.

In his opinion, this situation needs to change and it is important to disclosure personal data.

“As a Chairman of the STS, I will make every effort to reveal the personal data of Ukrainians on paid taxes. This is not about received income but about paid taxes. Then we will really align the tax landscape” – emphasized Oleksiy Lyubchenko.   

He also noted that business will be better able to pay taxes when there is a clear and understandable position regarding efficiency of budgetary expenditures. This is a kind of motivational element and at the same time very important.

“Personally, I am of the opinion that the tax rates are not decisive. I categorically do not support the idea of raising tax rates. We need stability in this. All questions are in administration. A striking example is the value added tax. The VAT rate has not changed but the business has paid almost 1.6 times more in 4 months of this year than in the past” – specified Oleksiy Lyubchenko.  

Chairman of the STS also stated that the Tax service actively works on simplification of reporting and development of services for business.

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