The leadership of the President’s Office and international experts discussed the model of the future tax reform
Under the patronage of the Office of the President of Ukraine and with the participation of international experts, the Ukrainian tax reform and anti-corruption summit was held, dedicated to discussing the configuration of the future tax reform.
As President of Ukraine Volodymyr Zelenskyy emphasized in his speech in the Verkhovna Rada on December 28, the existing tax system does not suit either those who pay taxes or those who collect them. Ukrainian citizens who receive salaries and pensions from these taxes are not happy with it either. The Head of State also noted that it is extremely important to reach national consensus on this issue.
Therefore, addressing the participants of the summit, Head of the Office of the President Andriy Yermak said that for the effective post-war recovery of Ukraine, it is necessary to create the most favorable tax conditions for investments.
“It is extremely important for us to attract both foreign and domestic investors to the construction of a new country. And for this, it is necessary to create the best conditions for doing business. And among them, the taxation model is one of the most important,” emphasized Andriy Yermak.
The Head of the Presidential Office noted that the future tax reform should create more attractive conditions for doing business in Ukraine than in any of the countries-competitors, and at least as comfortable as in the EU in general.
“In the global competition for investments, Ukraine should become a champion. At the same time, our reform should once and for all eliminate corruption from the tax sphere,” Andriy Yermak said.
Deputy Head of the Office of the President Rostyslav Shurma noted in his speech at the summit that the state should take into account the fact that private sector enterprises will play a leading role in post-war reconstruction and economic recovery. And that is why it is necessary to create favorable conditions for business development and to form reliable prospects for capital investments in order to prevent the outflow of entrepreneurs abroad.
“The system that we will propose for the post-war reconstruction of Ukraine should not be inferior to our competitors, such as Poland, Bulgaria, and Hungary. Of course, if the income tax here is 18%, and in Bulgaria – 10%, in Hungary – 9%, then certain questions arise. We need a fundamental reset, which will provide competitive conditions and eliminate the motivation for corruption,” noted Rostyslav Shurma.
In addition to lowering rates for all types of income tax, the economic reform project will also take into account a number of other aspects of the country’s attractiveness for doing business, the Deputy Head of the President’s Office said. In particular, this is the simplification of procedures for obtaining permits for the purchase of land plots and construction, rebooting the law enforcement and judicial systems, and creating the infrastructure for financing business projects. On the last point, Ukrainian experts are working together with such companies as BlackRock, JPMorgan and McKinsey.
“A comprehensive model of the creation of infrastructure for financing business projects has been prepared. It will be not about billions, but tens of billions of dollars of potential capital attracted to Ukraine,” he said.
The Vice President of the World Bank for Europe and Central Asia Anna Bjerde said at the summit that the management of the institution supports Ukraine in its efforts to implement anti-corruption tax reform despite the crisis caused by the war.
“The World Bank welcomes this summit, because both tax reform and anti-corruption initiatives are two incredibly important elements that Ukraine must deal with while simultaneously fighting Russia’s military invasion and solving the task of keeping the economy afloat,” Anna Bjerde emphasized.
American expert in economics, one of the authors of the Supply-Side Theory Arthur Laffer stated in his message to the participants of the event that the main tool of achieving success during the implementation of economic reform in Ukraine is to reduce the tax rate while simultaneously expanding the tax base.
He also wished the Ukrainian specialists – the authors of the economic reform – strength and success, as they face a huge task: now Ukraine needs a stable and efficient financial system more than any other country in the world.
“Nowhere are these problems more important than today in Ukraine. I don’t know of any economy in the world that needs more help and support in these matters than Ukraine, given all the trials and tribulations that are going on right now,” Arthur Laffer emphasized.