The European Business Association (EBA) has issued a statement regarding the decision of the Verkhovna Rada of Ukraine not to support the draft law No. 11416-d on tax increases. The EBA considers this decision to be balanced and rational, despite the need to fill the state budget in times of war, reports Komersant ukrainskyi
“Understanding that the total additional budget needs are currently UAH 500 billion due to the increase in defence spending, the business still considers the decision not to consider this draft law to be balanced and rational,”
– the EBA said in a statement.
The EBA emphasises that the proposed tax increase could have a negative impact on the country’s economy, as the entire burden would fall on honest businesses.
“This could obviously have a devastating impact on the country’s business and economy. As transparent businesses will be put at an even greater disadvantage to the shadow economy, the working environment for entrepreneurs will unfortunately become even more unpredictable,”
– the EBA emphasises.
Instead of raising taxes, the Association suggests focusing on combating the shadow economy. According to experts, it is the shadow sector that is responsible for billions of hryvnias in lost budget revenues.
Follow us on Telegram: the main news in a nutshell
“In order to continue building an even more progressive country, we are convinced that, especially now, we need to pay close attention to the things that are the source of unfair and unequal rules of the game in the country,”
– the EBA states.
Among the specific proposals, the Association names:
- Customs reform.
- Ensuring effective work of law enforcement agencies.
- Launching the normal operation of the Bureau of Economic Security.
- Settlement of the problem of shadow employment.
- Revision of the mechanism of taxation of the car market.
- Strengthening the fight against grey schemes in e-commerce.
The EBA also calls on the government to provide calculations and an assessment of the economic impact of the tax increase, including the potential impact on investment and further business operations.
“We hope that the voice of business will still be heard, the draft law No. 11416-d will no longer be put to a vote by MPs, and together the government and business will be able to formulate rules that will contribute to budget revenues without destroying the work of transparent business!”
– concludes the European Business Association.
Thelatest, revised version of the draft law on tax increases was considered by the Rada two days ago and failed to pass it in the first reading. The Parliament sent it back for a second first reading with a shorter preparation period.