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Ukraine Agrees New Tax Code

by Tatiana Smolenska, Tax-News.com, Moscow

08 December 2010


Changes to Ukraine’s tax code have been approved by parliament, ending two weeks of protests by small business owners.

Protests and strikes began on November 16, before parliament approved the previous tax code two days later. Despite the protests, the code, approving a 2% year-on-year reduction in corporation tax until 2014, but limiting the numbers of self-employed able to claim a flat rate of income tax, won approval in parliament.

The about turn by President Viktor Yanukovych sees the restoration of the flat rate tax for the self-employed, and will allow the 2011 state budget to be adopted by December 20, paving the way for the country to receive the next USD1.6bn instalment of its bailout funding from the International Monetary Fund.

Bowing to pressure, the President met protesters in person at Kiev’s Independence Square on November 27, before his decision to veto the November 18 parliamentary decision. He said:

"I share the concern of the people about the tax code restricting the rights of the entrepreneurs and disproportionately expanding the role of the tax administration. I am absolutely against such approaches; and through exercising the right of veto I return the Tax Code to the Parliament."

The revised code was approved on December 2 by 268 of the 450 seat legislature.

TAGS: tax | small business | business | entrepreneurs | budget | corporation tax | Ukraine

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