Deputy head of President's Office Shurma hopes for adoption of liberal tax model within six months

KYIV. Aug 17 (Interfax-Ukraine) – A new liberal tax model with the abolition of the single social security contribution and military tax is currently being discussed with the participation of the Office of the President and can be adopted within six months, Deputy Head of the President’s Office Rostyslav Shurma has said.

"There is no final decision yet. But yes, we are indeed discussing a model called "10-10-10": 10% income tax, 10% personal income tax (personal income tax) and 10% VAT (value added tax)," he said in an interview with Ukrainian Forbes published on Tuesday.

Shurma said that this model involves the almost complete abolition of all benefits, increased liability for violation of tax laws and "things like, for example, access to tax information about bank accounts to prevent tax evasion."

"Unfortunately, we have not yet reached a consensus on this issue, but I hope that in the coming months – six months we will be able to adopt a new tax model," the Deputy Head of the President’s Office said.

According to him, the main obstacle is the answer to the question of what will happen to budget receipts in the coming year, since the budget is already unbalanced: only 30% of needs are covered by own revenues.

Shurma said that it is necessary to find compensators and added that in Ukraine environmental pollution or harmful consumption, that is, tobacco, alcohol, oil products, is not taxed enough.

"Another idea is tax incentives for the development of the processing industry, which involves the abolition of VAT refunds on commodities," he said.

The deputy head of the President’s Office said that he is a big supporter of such radical tax changes, and believes that they should be introduced now.

"This is also our unique chance to change the culture of paying taxes in the country. However, this is indeed a very responsible decision, so we should take it only when we reach a consensus," he said.

Regarding the idea of introducing a 10% additional fee for the purchase of foreign currency for imports, Shurma said that he supports it and considers it not so much a way to fill the budget as a means of combating speculators and supporting the national producer.

"This tax should reduce the demand for currency from unscrupulous businesses that use the opportunity to make settlements within 180 days. Accordingly, this will equalize the balance of payments and reduce pressure on the hryvnia," he said, predicting a decrease in demand for currency by $1-2 billion.