In accordance with the adopted National Revenue Strategy until 2023, the government will focus on teaching Ukrainians to use their own resources to ensure their prosperity. Concerning both the business sector and workers, as well as regulatory authorities.
Forbes talks about this in more detail
It should be noted that the adoption of the National Revenue Strategy (NSS) for the coming years even before the end of 2023 was one of the IMF’s requirements for Ukraine before the subsequent revision of the current financing program.
Thus, the simplified taxation system (STS) is an effective solution for companies and individual entrepreneurs, allowing them to pay a single tax instead of the usual personal income tax, unified social tax and military tax. The system is currently used by about 1.7 million taxpayers. The total number of these participants results in stable tax revenues of approximately 0.9% of GDP between 2020 and 2022. However, large businesses may begin to use the system, despite the fact that it was created to support small enterprises.
MTR reform in 2025-2027
During the three years of the transition period, the single tax rates for legal entities of the third group will gradually increase to the standard income tax rate, which is 18%. The final levels and individual bet values will still be subject to discussion. The main goal of this initiative is to encourage legal entities to gradually and independently transition to a common taxation system. After the end of the transition period, companies will be prohibited from using the simplified tax system.
The second and third groups of SSO for individual entrepreneurs will be combined into one group. A differentiated scale of rates will be created for it, from a minimum of 3% for trading activities to 17% for a number of services. This will also happen gradually. For payers in this group, the use of PPO will be mandatory.
The list of activities that are allowed to participate in the first group will be revised to exclude high-margin businesses. The flat tax will be abolished and a rate calculated on the actual income received will be introduced instead.
For peasant farms (individuals) that will remain in the fourth group, the tax base will be expanded starting from the year when land taxation based on mass assessment is introduced in Ukraine. For producers of agricultural products (legal entities), the single tax rates will be gradually increased over three years to the level of the standard income tax rate, which is 18%.
Exceptions that allow avoiding accounting and documentary confirmation of the origin of goods during sales will be canceled. Further, the accounting requirements will be simplified as much as possible, but will remain mandatory regardless of the legal form and/or type of activity of the payer.
Personal income tax
Personal income tax (PIT) in Ukraine is based on a flat rate of 18%, which was introduced in 2016. The government is now considering reinstating the progressive scale, which previously included rates of 15% and 20%. The parameters of this scale for the future have not yet been specified, but they will be broader, suggesting one or two significantly higher personal income tax rates for individuals with high incomes.
The minimum tax-free income will be replaced by the provision of personal social assistance, and all personal income tax benefits will be revised.
At the same time, changes will be made to the legislation, which will allow regulatory authorities to strengthen monitoring of income and expenses of individuals by accessing banking information on the movement of funds in their accounts.
