UNLA representative presents expert version of amendments to the VAT legislation to the KSCA
On March 5, the Kyiv City State Administration hosted an expert discussion on “A Big Tax Offensive on Small Business: How to Protect the Ukrainian Economy from Catastrophe?”, during which Liudmyla Kozhura, representative of the Ukrainian National Lobbyists Association, Secretary of the Board of Trustees of the Association, Doctor of Law, Professor, Director of the Law Institute, presented an expert version of amendments to the legislation on value added tax (VAT).
The purpose of the roundtable was to form a consolidated position of Kyiv’s small businesses on the government’s tax initiatives and to develop effective mechanisms to protect individual entrepreneurs from excessive fiscal burdens that put their businesses on the brink of survival.
In her speech, Ms. Kozhura emphasized:
“Tax changes today directly affect the future of the Ukrainian economy, as small business is its key foundation.”
According to the analysis of researchers at the Center for Legal Information, Professional Development and Expert Research of the Vadym Hetman Kyiv National Economic University Law Institute, the proposed changes to tax legislation may create additional fiscal pressure on small businesses. In particular, it concerns the expansion of mandatory registration as VAT payers, which effectively eliminates the logic of the simplified taxation system.
The experts also pointed out that the current VAT registration limit of UAH 1 million does not correspond to current economic realities and inflationary processes, which automatically puts more and more entrepreneurs in a more complicated tax regime.
That is why the Ukrainian National Lobbyists Association has proposed an alternative approach to reforming the VAT system.
First, a moratorium on increasing the tax burden during martial law.
Secondly, the VAT system should be adapted to the EU standards, but gradually and without administrative shocks for business.
Thirdly, to provide additional protection for micro and small businesses from excessive fiscal pressure, in particular by limiting penalties and tax audits in times of crisis.
As Ms. Kozhura emphasized:
“Small business is not a problem for the budget, but the foundation of the state’s economic stability, especially in times of war.” According to the participants of the discussion, the proposed expert version of the amendments can become the basis for further professional dialogue between business representatives, academia and public authorities on the formation of a balanced tax policy.
