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The parliament talks about future tax changes in Ukraine. As part of their work on the National Revenue Strategy up to 2030, the Committee on Finance, Tax and Customs Policy is preparing proposals for changes in five priority areas of taxation, saidthe head of the committee, Danylo Hetmantsev. First, the unification of Ukraine's tax legislation with EU legislation is envisaged. Secondly, the reform of the simplified taxation system is planned. It is proposed to use Poland's simplified tax system. The third item deals with changes in income taxation to combine the single social contribution, military levy, and personal income tax into a single tax with a reduced rate. Fourthly, it is planned to reform the environmental tax, and fifthly, to review the scope of local taxes. According to the parliamentarian, they should align with real economic criteria and become a powerful source for financing local budgets. Digitalization of the tax system is also anticipated.
Ukraine is technically ready for the first international exchange of tax information. As reported by the Ministry of Finance, the development of software for the State Tax Service of Ukraine (DPS) has been completed, which will provide an international automatic exchange of information according to the General CRS reporting standard and the Country-by-Country Reporting (CbCR) standard with more than 100 foreign tax administrations. From now on, the DPS has the technical capacity to start the first exchanges with tax authorities from different jurisdictions who are participating in relevant international multilateral agreements. The first exchange of financial account information under the CRS will occur in 2024 for the second half of 2023 (the first reporting period). In the future, the previous calendar year will be considered the reporting period. It is noted that the inclusion of Ukraine in the international system of automatic information exchange will contribute to creating a more transparent tax environment and increase the image of Ukraine as a reliable and equal partner in international information tax relations.
The IMF will not accept a new bill on taxation as a fulfilled benchmark in its memorandum with Kyiv because lawmakers have fundamentally altered its text, Ukrainian MP Yaroslav Zheleznyak said on Telegram on August 22. Zheleznyak said lawmakers have altered the text of bill No. 8401 without the IMF’s approval after the deputy head of the President’s Office, Rostyslav Shurma, directly intervened. Bill No. 8401 restores the pre-war taxation system. In particular, it regulates the transition from a 2% single social contribution.
6.1.3 Budget dynamics - funding
Budget disputes in the EU threaten further aid to Ukraine. EU funding to support Ukraine is being held back by disagreements between member states, while concerns about strained national budgets and rising spending in Brussels threaten the flow of financial aid to Kyiv. According to the FT, Brussels' request for an additional €86B in funding, aimed at easing the burden on the EU budget and at the same time extending its four-year support of Ukraine, has divided member states and led to calls for reductions in funding and longer approval periods. The debate is a crucial test of the West's resolve to support Ukraine, as skeptics in Europe and the US have begun to point to the limited success of Kyiv's summer counteroffensive. Brussels offered to extend the last funding package for Ukraine for four years, partially to protect
42 UKRAINE Country Report September 2023 www.intellinews.com