KYIV. May 30 (Interfax-Ukraine) – Abandoning an income tax and switching to a 2% turnover tax did not have a stimulating effect on domestic production, but only allowed large businesses to save on paying taxes, instead Ukraine should reduce a tax burden on the wage fund from 41.5% to 10%, economic expert Oleksiy Kusch says.

"In my opinion, it is necessary to abolish the three main labor taxes – income tax, single social security tax and military tax – and instead introduce a single cumulative labor tax in the amount of 10% for operating enterprises and 0% for those enterprises that are idle, but pay minimum wage," he said at a press conference "War. Economic Dimension" at Interfax-Ukraine on Monday.

At the same time, the state should subsidize jobs and create an "internal labor front," Kusch believes.

"We need to gradually create jobs where services and supplies are 'covered' by volunteers – sewing uniforms for the military, weaving camouflage nets. We need to pay these people at least minimum wages and thus launch internal economic processes," the expert explained.

At the same time, the policy of cutting corporate taxes had no effect on the economy, he notes.

"The tax maneuver associated with the fact that enterprises were offered to switch to a 2% turnover tax, and the amount of turnover was increased to UAH 10 billion, did not have a stimulating effect on domestic production ... The idea that the economy is turning into one big sole proprietorship, didn't work. It was adopted in the interests of big business and large importers, which received huge preferences. But this did not have an impact on the improvement of logistics and the reduction of prices," Kusch stated.

According to the expert, it is naive to stake on the IT business even after the end of the war and expect the growth of companies in this sector, since it will be extremely difficult to conduct such a business in a situation of military threat.

"We are already seeing a crisis in the IT business," Kusch said.