+ Word must be in search result. - Words must not be in search result. * Word start/end on characters before/after symbol. ""Words in quotes will be searched as phrase.

 

 

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

13 May, 2022 Blog

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.

Views 6473

SIMILAR POSTS

New mobilization rules: The Law has been adopted 11 April, 2024    1163

Introduction of an electronic office for conscripts, persons liable for military service, and reservists 04 April, 2024    398

The coefficient for the Military Tax: “to be, or not to be”, or how to determine the tax base for the Military Tax in case of payment of income in kind 14 March, 2024    264

Military registration, mobilization and military service in a new way: what to expect 08 February, 2024    1035

A postponement of conscription as a mandatory precondition for crossing the border by men during martial law 07 February, 2024    466

Some practical aspects of the departure of men abroad during martial law 07 December, 2023    470

How should business interpret announcement of the 10-10-10 (+3) tax reform 13 September, 2022    700

The departure of men abroad under martial law – is there a ban? 15 August, 2022    16185

The Supreme Court: tax audits conducted in violation of the moratorium under the Tax Code with reference to the Resolution of the Cabinet of Ministers of Ukraine No. 89 are illegal 13 May, 2022    1832

A nonfunctioning Electronic System of VAT Administration – who should be responsible? 06 May, 2022    2801

Yuliia Kryvomaz delivered the report at the meeting of the UBA Committee on Tax and Customs Law 06 May, 2022    789

The Ministry of Reintegration adopted the List of territorial communities which are located in the area of fighting or are under temporary occupation, encirclement (blockade) – is it applicable for tax purposes? 04 May, 2022    20095

Comment