“Why is there no tax on withdrawn capital among the priorities of the government’s work?” – asks Tetiana Ostrikova

According to MP Tetiana Ostrikova, who is a member of the Verkhovna Rada Committee on taxation and customs policy, today during an hour of questions to the government, the Prime Minister spoke about the government’s agenda, new economic laws, but the tax on withdrawn capital was not mentioned among the priority issues.

“It is clear that the government does not hear and does not understand that this issue has already become a national idea of Ukrainian small, medium and large businesses. Yesterday, these were not only the owners of cars with foreign registration that were protesting outside the Verkhovna Rada.

Yesterday, there were businessmen who work, who fill the budget and do not require anything from the state; they do not ask for anything, but they hope that the tax on withdrawn capital – which has become the national idea over the past 4 years – will be introduced still by this parliament.”

Among the advantages of the tax on withdrawn capital, there is a growth in jobs, an improvement of our business’ competitiveness and, accordingly, economic growth: “As soon as in three years the tax on withdrawn capital will bring an annual additional GDP growth of 1% and additional investments of at least 110 billion annually. The money will remain in Ukraine, will not be withdrawn from the country under the guise of royalties, interests to non-residents, as it is done now in order not to pay income tax. This is a simplified tax administration, there will not be endless tax audits that don’t let businesses work. The state budget will receive more funds and this means additional pensions, the construction of new hospitals, schools, roads. And finally, Ukraine will be able to compete for investors with other countries.”

“Today, in neighbouring Poland, an investor can get a tax holiday on income tax for 10 or even 15 years, depending on the size of investments, the unemployment rate in the region and the number of jobs created. While Hungary has reduced the income tax to 9%. Latvia, Estonia, Georgia today have no income tax at all. They have the tax on withdrawn capital.”

According to Ostrikova, there are a lot of talks about the country’s investment climate and the competition for investors in the parliamentary hall, but neither the Verkhovna Rada nor the Cabinet of Ministers takes any clear steps to attract investments: “I would like to ask the parliament and the government how else we can compete for investments today if not by creating a favourable tax environment? I really hope that this issue will appear among that new agenda of the government and among the top priorities of the parliament, and this parliament will vote for the bill on the abolition of income tax and the introduction of the tax on withdrawn capital, at least in the first reading.”

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