Diia.City United opposes the government's bill to increase taxes

Diia.City United opposes the unjustified increase in taxes on corporate turnover (income) and personal income and calls on the government to develop other sources of budget revenues.

The government has submitted to the Verkhovna Rada a draft law No. 11416 of 18.07.2024 on the peculiarities of taxation during martial law.

We understand the complexity of the financial situation in the country and the need to fill the budget, including for defense spending. At the same time, we oppose the unreasonable increase in taxes on corporate turnover (income) and personal income and call on the government to develop other sources of budget revenues based on the following.

The proposed changes will lead to greater shadowing of the economy.

Diia.City United emphasizes that such changes will lead to a greater shadowing of the economy and an increase in the tax burden on honest taxpayers. It will also affect the outflow of business and investors' decisions on possible investment in Ukraine. We believe that it is necessary to focus on other sources of state budget revenues, not limited to de-shadowing the economy, including

• administration and collection of taxes and customs duties,
• reforming the State Tax Service and the State Customs Service,
• shadow sectors of excisable goods,
• reducing state budget expenditures through the digitalization of all services, etc.

Therefore, Diia.City United calls on the Government and law enforcement agencies of Ukraine to intensify efforts to de-shadow the economy and fight the shadow economy to ensure budget revenues and fair competition.

Theunion also draws attention to the fact that the state has committed itself to the legal and tax space for the tech business Diia.City: for 25 years, to ensure compliance with these guarantees and the stability of its conditions, which determine the specifics of taxation, observance of the rights and legitimate interests of Diia City residents and specialists involved. Therefore, raising turnover (income) taxes on Diia City residents and the professionals they employ will not meet the obligations assumed by the state.

Unfortunately, the proposed changes have not been discussed with business associations and therefore do not take into account the position of business. Therefore, we call on the Parliament and the Government, with the support of the IMF, the European Union and the G7 member states, to ensure immediate efforts to de-shadow the economy and fight against dishonest taxpayers, reduce state budget expenditures and introduce a balanced and fair tax policy.

Diia.City United is open to dialogue with MPs and representatives of the Cabinet of Ministers of Ukraine and all stakeholders to develop solutions for other sources of budget revenues.