A total of one million individual businessmen and companies had opted to pay tax under the single tax system as of July 1, 2011, the director of the department for taxation of individuals at the State Tax Administration of Ukraine (STAU), Stepan Dusiak, said at a press conference last week.
He said that as of July 1, 2009, 1.052 million single taxpayers had been registered, and as of July 1, 2010 their number had grown to 1.127 million.
He said that the fall in the number of single taxpayers was due to their switching to the general taxation system.
He said that as of July 1, 2011, the total number of businessmen in Ukraine came to 2.428 million, and as of July 1, 2010 their number was 2.47 million.
The Ukrainian parliament on June 16, 2011 passed at first reading the government’s draft law No. 8521 on amendments to the Ukrainian Tax Code and some other Ukrainian laws (on the single tax system and registration of reports of small businessmen).
Draft law No. 8521 proposes that individual businessmen paying the single tax are to be divided into three categories depending on the hiring of workers and their income.
The government proposes to peg the single tax to the level of the minimum wage and oblige the payers of the single tax to register as VAT payers if services are rendered to VAT payers.
The first category would include persons who do not have hired employees and whose income does not exceed 150 minimum wages (around Hr 150,000). The tax rate for the said companies is set within the 1-10% of the minimum wage (Hr 10-100).
The second category is persons who hire no more than ten employees and whose income does not exceed 1,000 minimum wages (around Hr 1 million). The tax rate is 2-20% of the minimum wage (Hr 20-200).
The tax rate for the third category is set at 3% of income if VAT is paid or 5% of income if VAT is not paid.
The limit for annual turnover for the single tax system was proposed with a four times rise for individuals, to Hr 2 million and a five times rise for companies, to Hr 5 million.
The president’s decree on the single tax system No. 727/98 of July 3, 1998 is to be in effect until amendments to the Tax Code that took effect from Jan. 1, 2011 are made.
In addition, from April 1, 2011, Section Three of the Tax Code introduced a ban on considering the purchase of goods from single taxpayers as gross expenses and instead to tax them under the tax on profit.
