Poroshenko P.O., President of Ukraine
Prime Minister of Ukraine Groysman V. B.
Chairman of the Verkhovna Rada of Ukraine Parubiy A.V.
On behalf of the Ukrainian Business Council (UBC), which includes 63 business associations, we are asking you to establish clear and unambiguous rules of taxation without excessive control and intervention by the state for the sake of equality of all before the tax law. In order to achieve this, we call for an urgent elimination of the discretionary nature of the corporate income tax and the transition to an innovative tax model – distributed profits (capital duty tax).
Principles on which to build such a model:
- the moment of payment of tax occurs when the owner deducts funds in the form of dividends or equivalent payments;
- minimization of discretion, including all questions regarding the application of the law, must be prescribed in the law without the need for additional clarifications from the DFS;
- the control over the payment of this tax must be exclusively external, without the need for an audit of the accounting of enterprises;
- in order to reduce the work of the DFS and in order to concentrate on more large-scale and risky transactions, only operations related to foreign trade activities are subject to documentary inspections;
- the rate should be no more than 15% in order to reduce the expediency of tax evasion in the territory of Ukraine;
- Primarily invested capital should be deductible without any taxation.
We believe that to compensate for possible temporary budget losses from the implementation of the model of the tax on withdrawn capital is quite realistic due to: 1) reduction of inefficient expenditures of the State Budget 2) verification of social benefits and pensions 3) narrowing of the corridors for the calculation of land tax with the inclusion of real estate tax in tax on withdrawn capital and all other direct taxes (personal income tax, single tax).
We call in the near future to consider the bill approved by the Cabinet of Ministers on the National Council of Reforms, to register the draft in Parliament and to adopt it as a law in compliance with the principles set forth above.
Regards
