Office of the President: The “10-10-10” reform is being actively developed and is planned to be implemented
Deputy Head of the Office of the President believes that it should be an anti-corruption reform that increases the country's competitiveness
What happened? Deputy Head of the Presidential Office Rostyslav Shurma said that the “10-10-10” reform is being actively developed and is really planned to be implemented. According to him, it should be an anti-corruption reform that increases the competitiveness of the country.
Source. His interview with RBC-Ukraine.
Details. This concept provides for 10% income tax, 10% personal income tax (PIT) and 10% value added tax (VAT), as well as the abolition of the unified social tax and 3% military tax.
“Countries, like any business, compete with each other, in particular in terms of the conditions for running business. And the tax component is perhaps the most important for making certain decisions on the location of production, the opening of regional headquarters, in particular by large companies,” Mr. Shurma believes.
He analysed the competitive field in which Ukraine is: income tax in Hungary is 9%, in Romania – 10%, in Bulgaria – 10%, in Estonia there is tax on withdrawn capital, in Poland – a tax on withdrawn capital for certain types of business.
“How can we compete for the placement of production, for the localisation of certain headquarters with these countries, if we even have a profit tax rate almost twice as high? We are losing this competition,” the deputy head of the OP said.
“The second component is the value added tax. There is an EU directive that sets a minimum VAT rate of 15%, but it allows differentiated rates. For the experiment, I took receipts from supermarkets in several European countries – Germany, Poland, Bulgaria and some others.
The average VAT rate on the product portfolio for household consumers is less than 10%. In Germany, 80% of products purchased by consumers are taxed at 7%. Most utilities are also 7%. The rate of 19% is saved for alcohol and expensive things that the average consumer does not buy. As a result, the average rate paid by the consumer is less than 10%,” Mr. Shurma said.
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