Military duty and increased taxes: what awaits Ukrainians starting from October 1 (yes, «will be adopted retroactively»)?

The Verkhovna Rada Committee on Finance, Taxation and Customs Policy has reviewed draft law No. 11416-d on a historic tax increase. By a majority vote, the Committee supported the document for the second reading. About this reported MP Yaroslav Zheleznyak.

The new version of the draft law No. 11416-d provides for certain changes in the legislation that will lead to an increase in taxes for citizens and businesses. We are talking about the following innovations:

• Increasing the military tax on personal income from 1.5% to 5%;
• introduction of the military tax for individual entrepreneurs;
• 50% tax on banks;
• Increasing the minimum tax liability for land;
• 25% income tax for financial companies;
• exemption of cashback from taxation;
• transition to monthly personal income tax reporting;
• increase in rent for crushed stone extraction.

Most of these rules were known even earlier. However, this time it is worth paying attention to the timing of the tax increase. According to Yaroslav Zheleznyak, the draft law will be considered by the Verkhovna Rada next week. The president’s signature is expected in the second half of October. At the same time, some of the provisions on tax increases will come into force «retroactively» as early as October 1.

At the same time, the government refused to postpone the law’s entry into force until November 1, and to partially replace the tax increase with a VAT increase.

This is not the first time that tax changes in Ukraine have been introduced with «retroactive to». Just a month ago Zelensky signed a law to increase fuel excise taxes from September 1 — it was implemented «retroactively».

We would also like to add that the other day, Danylo Hetmantsev («Servant of the People»), Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, said that a separate draft law on taxation of international parcels worth up to EUR 150 will be submitted to the Parliament in the near future. This provision was removed from the draft law No. 11416-d.

Additionally, Yaroslav Zheleznyak commented tax increase for «Diia City». In short, «Action City» also expects a general tax increase for «as for all», despite appeals of IT associations. However, the detailed description of the situation deserves a separate quote: