On the draft law No. 11416

As previously reported (see information on the website as of 26 July 2024), the Cabinet of Ministers of Ukraine at its meeting on 18 July 2024 adopted the Draft Law of Ukraine ‘On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Peculiarities of Taxation during the Period of Martial Law’ and submitted it to the Verkhovna Rada of Ukraine (Reg. No. 11416 dated 18 July 2024).

The draft law provides, as follows: an increase in the military duty rate for individuals to 5.0%; introduction of a military duty for legal entities under the general and simplified taxation system of 1% of income; payment of a military duty by mobile operators in the amount of 5% of the cost of mobile services; payment of a military duty on transactions for the purchase of precious metals from banks, retail trade in jewellery, etc.

However, as the First Deputy Chairman of the Parliamentary Committee on Finance, Taxation and Customs Policy, MP from the ‘Voice’ faction Y. Zheleznyak wrote on 13 August 2024 in his Telegram channel, this draft law ‘will not be considered until August. ‘No, no, the money has not suddenly appeared and the problem with the UAH 500 billion hole has not disappeared. It’s just that no one in power knows what to do about it, there are no votes. That’s why nothing is being put forward for the plenary week, which will be in August, and we are not convening a committee on this law. So, I think they will postpone the first reading until early September. And then, I believe, we will urgently push it to the second reading, because otherwise there will be no money. As a result, we will have three months to collect the amount instead of four. And taxes will have to be raised more and more radically…’.

The Verkhovna Rada Committee on Digital Transformation; the Ministry of Digital Transformation of Ukraine; the National Commission for the State Regulation of Electronic Communications, Radio Frequency Spectrum and Postal Services; and the Ukrainian Association of Telecom Operators Telas criticised the draft law, as well as provided their comments and suggestions.

From the Association. Why do we need to raise taxes? Maybe it would be better to look for funds in the country itself, because there are many, many of them. And all in foreign currency. This is evidenced, for example, by the latest news related to the seizure of more than EUR 4.7 million in unaccounted cash in the trunk of a car during the investigation by detectives of the Territorial Department of the Bureau of Economic Security in Kyiv region of criminal proceedings on tax evasion by a group of companies supplying products to the Ministry of Defence of Ukraine, as well as the detention by the Security Service of Ukraine of Deputy Minister of Energy of Ukraine O.V. Hale (already dismissed from his post by the order of the Cabinet of Ministers of Ukraine).

Unfortunately, these are not the only cases.