Ukraine technically ready for tax on withdrawn capital - expert
KYIV. Feb 1 (Interfax-Ukraine) - Ukraine is technically ready to impose a tax on withdrawn capital, which should replace corporate profit tax, Thomas Otten, the director of Otten consulting company, has said, commenting on the results of analysis of the economic consequences of the introduction of tax on withdrawn capital, conducted by the German advisory group at the government of Ukraine with the participation of the Institute for Economic Research and Policy Consulting and Otten Consulting.
"Why I say that Ukraine is ready in principle [to introduce tax on withdrawn capital] - the current system does not work, and therefore I see this as an alternative," he said at a press conference at Interfax-Ukraine.
Expert of the German Advisory Group of Ukraine David Zaha during the press conference noted the importance of replacing profit tax with a tax on withdrawn capital.
"The transition to a new tax will accelerate economic growth and promote investment ... We believe that economic consequences will be positive, but if we look at a short-term period, they will be rather limited," he said.
So, according to Zaha, the introduction of a tax on withdrawn capital in the first year could lead to the losses of budget revenues in the amount of UAH 38 billion to UAH 47 billion, which will be 1.2-1.5% of GDP.
"To ensure success of the introduction of tax on withdrawn capital, it is necessary to compensate for the loss of income that will arise as a result of such a step by increasing taxes or reducing costs, while making efforts to fundamentally reform the State Fiscal Service," the expert added.