Word Bank likes Ukrainian tax reform
2012-11-22 10:58:00
Ukraine is among three countries (also Belarus and Azerbaijan) in Eastern Europe with the economies showing the largest fall in tax compliance hours over the eight years, the World Bank said in its Paying Taxes 2013 report, issued on Wednesday, the State Tax Service of Ukraine (STSU) reported.
According to World Bank experts, this region has recorded the largest fall in the average time to comply for any of our regions. The hours to comply started to fall in Paying Taxes 2008 and the reduction accelerated thereafter. The average time to comply has fallen by 200 hours.
"In Ukraine the hours to comply fell to 491 in Paying Taxes 2011 from 2,085 in Paying Taxes 2004. The main drivers for this fall were the increased electronic registers for corporate tax and for all social contributions including pension fund contributions, security taxes in 2011. The compliance time is expected to reduce further in the future as companies become more comfortable and familiar with using the online systems," reads the report.
According to STSU experts, before the end of 2012 this figure will drop to 320-350 hours, as planned.
Also, in the paper the World Bank notes that "Ukraine and Belarus are the economies which again have been the driving force behind the reduction in this indicator and for Ukraine the reforms giving rise to this reduction have largely taken place in the most recent period. The main reform driving the reduction has been the introduction of online filling and subsequent increase in the use of online facilities by businesses."
In the Total Tax Rate, compared with 57.1% in 2011, experts from the World Bank noted a decline to 55.4% in 2012. Meanwhile, STSU specialists remind that next year businesses face further liberalization of interest rates provided by the Tax Code: the income tax rate from January 1, 2013 will be reduced to 19%, VAT rate - to 17% in 2014.
In the Tax payments table provided in the Paying Taxes 2013, Ukraine achieved a significant progress: from 135 payments in 2011 to 28 payments in 2012. With the introduction of online filling and payment system, average payments in all countries of the world - 27.2, in the region of Central Asia and Eastern Europe - 30.4. The greatest number of payments (24) in Ukraine account for payroll taxes, while the income tax is administered only by 1 payment.
The tax authorities note that the findings of the World Bank experts will be taken into account in developing a program of liberalization of state tax policy.