Ukraine’s tax system is failing the nation. The punitive rates continue to force the economy in the shadows, robbing the state treasury. This has been the case since Ukraine became an independent nation in 1991.

Unreasonably high payroll taxes on employers are such a burden that many employees are simply not counted or their incomes hidden. Honest employers are forced into this dishonesty of paying salaries under the table, in cash, because many would not financially survive if they paid the official tax rates.

While oligarchs and insiders hide their profits offshore, employers without such nifty arrangements are supposed to fork over to the state from their own pockets 50 percent of the amount they pay their employees, as payroll contributions.

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