The Cabinet of Ministers approved the bill to replace the income tax analogous to the tax on the capital. About it reports a press-service of the government.

The bill provides for changes to the Tax code.

The Cabinet decided to refer the decision for review to the National Council of reforms.

Prime Minister Vladimir Groisman said that after the introduction of the bill into effect in 2018, it can lead to a decrease in revenues to the state budget by 40 billion UAH.

Finance Minister Alexander danyluk said that the Ministry of Finance sees a possibility to compensate for possible losses from introduction of this solution by reducing taxes.

“A tax on the capital instead of income tax will encourage businesses to reinvest in production and development. It will also simplify tax rules and administration requirements and will improve the investment climate in the country. However, it should be noted that the implementation of the provisions of the bill in 2018, will lead to state budget losses in the amount of 26 billion UAH and local budgets – UAH 5.4 billion”, – the press service of the Ministry of Finance.

The Agency calls the possible ways of compensation of budget losses – a significant increase in tax rates or spending cuts. The Ministry of Finance categorically against raising taxes and believes the only way to find compensators a reduction in public spending and more efficient use of budget funds.

The largest payers in the first half of 2017 declared income tax in the amount of 32.4 billion UAH, which is by 10.4 billion, or 47%, more than the actual charges for the first half of 2016.

The Cabinet approved the replacement of the income tax 04.10.2017

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