The government wants to set a minimum personal income tax

Having taken away the "military personal income tax" from local budgets last year, the government came up with a new way to fill local budgets - the introduction of a "minimum personal income tax" for business employees.

The government's draft law No. 11416 provides for the right of local councils to set the minimum personal income tax base for their respective territories.

In other words, if an employee's salary is less than such a minimum PIT tax base, the employer must pay to the budget the difference between the accrued tax on this minimum base and the withheld PIT on the salary paid to the employee at its own expense.

For example, if the local council sets the minimum tax base for personal income tax at UAH 20 thousand and the employee's salary is UAH 15 thousand, then

▪️ UAH 2700 of personal income tax (15000 x 0.18) must be withheld from the employee and transferred to the budget,

▪️ plus UAH 900 of personal income tax (20000 x 0.18 = 2700) must be paid to the budget by the employer at its own expense.
This will not apply to institutions and organizations financed from the state budget, public utilities, and enterprises of people with disabilities.

MP Nina Yuzhanina asks: "On what basis will local authorities determine the minimum personal income tax base? On the basis of their own ideas about the level of wages?

This is a violation of the Constitution and the Tax Code of Ukraine, since PIT is a national tax, and local authorities have the right to establish only local taxes and fees."