The negative consequences of doubling the military tax rate,
and
How to ensure that all we pay to the army is really spent on the army
The draft laws of the “7311” series (for example, the draft law No. 7311-д as of May 1, 2022) provide for a doubling of the military tax rate by making respective amendments to the Tax Code of Ukraine.
No one doubts the need for the proper defense funding. The only question is whether the proposed step will be relevant or whether it will actually do more harm.
It is worth to mention the right granted to the Cabinet of Ministers of Ukraine to redistribute budget funds in favor of defense. And in this way the main task may be to increase budget revenues as a whole, rather than a separate tax. Doubling the military tax may have an inactive effect in this regard, given all the consequences.
For many companies, that have shut down or significantly reduced their activities, payment of wages to employees is a heavy burden now. Instead of helping companies keep their employees during difficult times, the state is trying to complicate this by increasing the burden on the payroll.
In addition, the recent publication on the “Ekonomichna Pravda”(Economic Truth) web-site says that, revenues from the military tax are not credited to the needs of the Armed Forces of Ukraine directly, but to the general state budget.
In fact, revenues that were collected as a military tax did not necessarily go to the needs of defense, but to the purposes determined by the deputies when adopting the budget law for the respective year.
We consider it worthwhile to legislate for taxpayers, at least during martial law, the possibility to pay both military duty and national taxes in general (including in advance) directly to a determined account of the Armed Forces of Ukraine or the Ministry of Defense of Ukraine (with notification of the State Tax Service), and recognize this as due payment of taxes. The targeted nature of these funds should be established at the legislative level and their redistribution to other needs shall be prohibited. Then the taxpayers will be sure that what they have paid will really go to the needs of defense, and not to some other current whims.
The full version of the article is available in Ukrainian by the link.
SIMILAR POSTS
The employee’s reservation is impossible: The conscript is listed as “wanted”
3190
Reservation of employees in Ukraine: Updated importance criteria
1372
Criteria for determining enterprises that are critical and reservation procedure: what will change as of December 01, 2024?
7492
Departure of men abroad: an officially issued postponement is a basis for crossing the border
3752
Reservation of employees through the Diia Portal: what problems businesses have already faced
2406
Reservation of employees through the Diia Portal
1936
Why and when men under 25 can be mobilized
5777
Changes to the reservation procedure of persons liable to military service
9520
Obligation to update military registration data from May 18, 2024
7399
Mobilization of convicts, persons with a criminal record, suspects and accused persons
28027
New mobilization rules: The Law has been adopted
5942
Introduction of an electronic office for conscripts, persons liable for military service, and reservists
1621
