KYIV, UKRAINE, October 11, 2024 /
EINPresswire.com/ -- The Ministry of Finance of Ukraine has announced an initiative to review tax benefits within the framework of cooperation with the International Monetary Fund (IMF). This decision, supported by the Cabinet of Ministers, marks a significant step towards fiscal reform and effective management of tax policy. Receiving $760 million in grants and loans from international partners shows that these changes are aimed at ensuring Ukraine’s long-term financial stability. However, achieving this goal requires a thorough and honest review of existing tax incentives.
Time of change: new economic challenges
After the outbreak of full-scale war, the government introduced unprecedented tax breaks to support businesses at a critical time. But now is the time to review these measures. It is important to determine which of them have lost efficiency and focus on those that will not burden the budget, but will benefit the economy. Therefore, the approach to tax benefits in 2025 should be balanced and rational.
“According to forecasts, tax benefits for 2025 will amount to UAH 154.7 billion, a significant part of which will be aimed at supporting defense industry enterprises. This is the right decision, but it is also important to reduce those exceptions that have lost their relevance.” This will help maintain a balance between supporting business and increasing revenues to the state budget,” said Alona Lebedieva, the owner of the Ukrainian multidisciplinary industrial and investment group of companies Aurum Group.
Uneven tax burden and the need for reforms
Despite the need for tax reform, concerns about the uneven tax burden remain. The Verkhovna Rada passed a bill on tax increases: the military levy was increased from 1.5% to 5% (excluding military personnel), and an additional tax was introduced for the Individual Entrepreneur. Businesses are required to file monthly returns and banks are now subject to a 50% corporate tax rate in 2024. These measures are designed to provide additional resources for the wartime budget, but also place a significant burden on businesses that operate transparently.
“Unfortunately, those who use tax evasion schemes go unnoticed. This creates an imbalance and a sense of injustice. Business does not see enough effort to fight corruption and illegal pressure from law enforcement agencies. The new tax changes that came into force on Oct. 1, caused outrage due to the violation of the principle of non-retroactivity of the law: they were adopted recently, but will be applied retroactively. This is a gross violation of the legislators,” says Alona Lebedieva.
Public demand for justice
Today, there is a strong public demand for justice and transparency in Ukrainian society. The review of tax benefits and the increase of tax rates is not only a demand of international partners, but also part of a wider reform, which must be carried out openly and fairly.
“However, I repeat that only with the help of real changes in the tax system and an effective fight against corruption will we be able to attract additional funding and create conditions for the long-term recovery of the economy,” says Lebedieva.
Fiscal reform is not just a technical task, but a way to build a sustainable economy capable of facing the challenges of our time.
Alona Lebedieva
Aurum Group
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