UNLA presented an alternative draft law on the introduction of VAT for private entrepreneurs
The Ukrainian National Lobbyists Association has developed an alternative draft law on the introduction of a value added tax for individual entrepreneurs.
According to the UNLA, the initiative was prepared by Oleksiy Shevchuk, Chairman of the Board of the Association, Lyudmyla Kozhura, Deputy Chairman of the Board of Trustees, and Nazarii Volianskyi, Development Director of the UNLA and member of the Taxpayers Association.
The UNLA notes that the purpose of the alternative draft law is to protect small and medium-sized businesses under martial law and post-war recovery, while gradually adapting Ukraine’s tax system to the requirements and standards of the European Union.
Unlike the government’s approach, which actually shifts the main tax burden to small businesses, the draft law proposed by the UNLA provides for a balanced model that takes into account economic realities, security risks and institutional vulnerability of entrepreneurs in times of crisis.
The key provisions of the alternative draft law include the introduction of temporary moratoriums on expanding the range of VAT payers, raising tax rates, and changing the limit of mandatory VAT registration for the entire period of martial law and until the end of the year after its termination.
The document pays special attention to the issue of a flexible limit for VAT registration. The UNLA proposes to abandon the fixed threshold of UAH 1 million and link it to the minimum wage, which will automatically take into account inflationary processes, changes in GDP and overall macroeconomic dynamics.
The alternative draft law also envisages gradual harmonization with EU law without sharp fiscal burdens for businesses. In particular, it proposes a gradual approximation to the European VAT threshold (about €85,000) by 2031.
An important element of the initiative is the preservation of the simplified taxation system. The draft law does not provide for mandatory VAT registration for single tax payers of the third group, which allows for the preservation of simplified accounting and reporting as a basis for small business development.
The document also introduces mechanisms to encourage voluntary VAT registration and to combat fraud. It provides for a model of combining incentives for voluntary entry into the VAT system with clear tools to combat tax evasion practices, in particular the use of so-called “salary PEs”.
A separate section of the draft law is devoted to protecting businesses in the frontline and combat-affected regions. It is proposed to introduce special guarantees, including a moratorium on documentary unscheduled tax audits for such taxpayers, which should reduce administrative and fiscal pressure and help to preserve jobs.
The UNLA emphasizes that the proposed approach allows to balance the fiscal interests of the state, Ukraine’s European integration commitments and the real capabilities of small and medium-sized businesses, which remain the key pillar of the national economy.
