After the law on tax increases was signed, 22.5 thousand individual entrepreneurs decided to stop their activities
18 December 12:58
on November 29, the day after the tax law was signed, a record number of business closures were recorded – 2,332. on November 27 and 28, many individual entrepreneurs also ceased their activities – 1,116 and 1,579, respectively. Such data is provided on the Opendatabot platform, Komersant ukrainskyi reports.
In total, 22,521 individual entrepreneurs have ceased operations since the President signed the law on tax increases. In the early days, the number of closures averaged more than 1,000 per day. For comparison, usually about 700 sole proprietorships close per day.
Such statistics suggest that the change in tax policy in the country did affect the decision of Ukrainians to close their businesses. In order to confirm or deny this assumption and better understand the impact of tax changes on entrepreneurs’ decisions, the Opendatabot platform is initiating a nationwide survey. You can take part in it via Telegram or Viber. The results of the survey will be available on the Opendatabot pages on December 24.
What are the usual dynamics of closing a sole proprietorship?
According to Opendatabot, a total of 254,288 sole proprietorships have ceased operations since the beginning of 2024. Most closures occurred in March – 28,690, but there were also spikes in activity at the end of the reporting periods. This is explained by the desire of entrepreneurs to avoid unnecessary tax liabilities and simplify their accounting.
Accordingly, the surge in the termination of sole proprietorships in the middle of the reporting period can be explained by the adoption and signing of the tax law, as some entrepreneurs consider the new taxes unfair. However, officials emphasize that Ukraine’s tax rates are quite low compared to the EU.
What does the new law “promise” to business?
The law on tax increases was passed by the parliament in the second reading on October 10. The president signed it on November 28. It was expected that the tax increase would take place retroactively from October, but the law came into force on December 1.
The document, among other things, provides for an increase in the military tax for employees from 1.5% to 5% and the expansion of the circle of its payers to include individual entrepreneurs.
The law also sets the corporate income tax rate for banks at 50% for 2024 and determines the amount of advance payments of corporate income tax for companies engaged in fuel retailing. In addition, it sets the basic corporate income tax rate for non-bank financial institutions (except for insurers) at 25%.
