Individual entrepreneurs will pay military duty, and for citizens it will increase from 1.5% to 5% – updated draft law from Hetmantsev’s committee

The Parliamentary Committee on Tax Policy has recommended that the Parliament consider the revised version of the draft law 11416-d on tax increases. As a reminder, last month The Cabinet of Ministers has prepared a draft law aimed at increasing tax revenues by an additional UAH 140 billion. It provided for the abolition of tax exemptions for foreign parcels from shops and a significant increase in the scope of military duty.

The updated version of the draft law 11416-d, approved by the Verkhovna Rada’s tax committee, has several relaxations. However, the general approach has not changed — Ukrainians will have to pay more taxes. According to Danylo Hetmantsev, the Committee’s chairman, the following amendments to the Tax Code of Ukraine are envisaged regarding the specifics of taxation during martial law:

• Increasing the rate of military tax on personal income from 1.5% to 5%;
• establishing a military fee of 1% of income for single tax payers of the 3rd group;
• establishing a military fee for sole proprietors — single tax payers of groups 1, 2 and 4 at 10% of the minimum wage;
• improvement of the proposed model for determining the amount of advance payments for profit tax purposes of enterprises engaged in retail fuel trade;
• setting the corporate income tax rate for non-bank financial institutions (except for insurers) at 25%;
• monthly reporting on the amount of income accrued (paid) in favor of taxpayers — individuals, and the amount of tax withheld from them, as well as the amount of the accrued single contribution.

The government’s draft law removed the provisions on the collection of military duty on transactions with cars, real estate and other assets. As a reminder, these provisions were the reason why, following the government’s tax initiatives Ukrainians emptied car dealerships in 2 days.

The document also stipulates that the increased military tax will be paid until the end of the year in which martial law is terminated. At the same time, a separate draft law on amendments to the Budget Code is to be developed. It should regulate the transfer of revenues from the military fee to the special fund of the State Budget for the purpose of their targeted allocation for security and defense needs.

Now the updated draft law 11416-d must be considered and adopted by the Verkhovna Rada. MPs will still have the opportunity to make additional amendments to the document during its consideration in the session hall.

Source: Judicial and legal newspaper