Oleksiy Lyubchenko: Comprehensive solution is needed to ensure decent pension

Press service of the State Tax Service of Ukraine, published 28 January 2021 at 14:46 Chapter: News

As of today, creating an effective pension strategy and ensuring decent pension is a crucial issue. This was stated by Chairman of the State Tax Service Oleksiy Lyubchenko during a meeting of the First Pension Forum in Ukraine.

“Taxes have nothing to do with pensions and taxes are not paid from pensions. But as of today pension, unfortunately, has a relation to taxes in Ukraine, as currently the pension fund is for 40% subsidized and depends on the state budget revenues. Answer to the question of ensuring decent pension lies in a comprehensive solution to a number of issues within the competence of the State Tax Service of Ukraine.” – stated Oleksiy Lyubchenko. 

According to him, the first step is to ensure a balance between the population and working places. Out of 29.6 million economically active population in 2019, the number of 11.8 million did not receive any income. That is, for per one employee in Ukraine there is one unemployed and one pensioner! In addition, statistics shows that 5 million working places have been lost in ten years, which may be in the “shadow”.

Chairman of the STS considers that this issue can be resolved at the expense of modern economically substantiated census.

The second step is to control consumer spending.

“This is actually the area where the tax base is monetized. During a year, as an example of 2019 shows that citizens can spend about 3 trillion UAH but the state controls only 1.2 trillion through a fiscal check. That is, I can state that our country does not control 60% of consumer spending and namely the tax base is formed through consumer spending.” – emphasized Oleksiy Lyubchenko. 

Chairman of the STS is assured that if every citizen of our country will increase a fiscal check by 100 UAH per month, it will additionally provide 1 billion UAH of income per month.

Disclosure of banking secrecy is also an important step. According to Oleksiy Lyubchenko, the controlling body of the state which sees risks of non-payment of taxes for hundreds of billions UAH has to have access to accounts.

“E-commerce, social media services, electronic money, cryptocurrencies are all the areas that are not controlled by the state today, where Ukrainians spend their income. It is out of country’s turnover and this is a huge amount of money and huge losses of working places, and, accordingly, taxes and contributions. It is banking secrecy in its current form that supports the “shadow” employment market. Almost 12 million people cannot be unregistered and receive no income” – emphasized Chairman of the State Tax Service. 

And the last, but not less important step is a zero declaration as a starting point without the possibility of further legalization of income. Citizens should understand that this is the first and last tax amnesty in Ukraine and income obtained by criminal means will not fall under the zero declaration.

“In general, most Ukrainians pay taxes consciously and honestly. We need to convince all citizens that decent pension is everyone’s responsibility today. And it is those who work in the “shadows” who shift their and their loved ones’ future social costs onto those who work legally. We inherited Ukraine from our parents in 1991. But sometimes they borrowed it from our children. Therefore, I am confident that a long-term pension strategy will take into account timely repayment of debts to our children in the future.” – stated Oleksiy Lyubchenko. 

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