Nova Poshta co-owner and Ukrposhta CEO again criticize bill on parcel taxation

Volodymyr Popereshniuk, co-owner of Ukraine’s express delivery leader Nova Poshta, and Ihor Smiliansky, CEO of Ukrposhta, are criticizing the updated bill to scrap the VAT exemption on international parcels worth up to EUR 150, and consider it to have been commissioned by Ukrainian retailers.

"The law, in my opinion, is not beneficial. If a person used to spend UAH 100 on parcels and now spends UAH 120, those extra 20 will most likely come at the expense of reduced spending in Ukrainian shops," Smiliansky wrote on Telegram.

According to the Ukrposhta CEO, he would have supported the bill if it were aimed at filling the budget and financing the army.

"But a law designed to increase the revenues of Ukrainian retailers - and there is nothing wrong with increasing revenues, it just needs to be said honestly - should not be presented as a law that levels the playing field," Smiliansky said.

At the same time, he noted that if the parcel law is adopted, the state company will comply with it.

"Moreover, thanks to joint work with MPs - and here I want to first and foremost thank Danylo Hetmantsev - there is an opportunity to make it the least painful from an operational standpoint, for people, and of course to prevent a customs collapse. But let us be honest: this has nothing to do with equal rules of the game for everyone," Smiliansky said.

In Popereshniuk’s view, expressed on Facebook, the bill on the taxation of international parcels could affect Ukrainian consumers, reducing their purchasing power, worsening their welfare, increasing corruption and the shadow economy, and potentially leading to a collapse of customs procedures.

Among other bills that the Nova Poshta co-owner does not support are the law extending the 5% military levy for three years after the war and bill No. 15111-d, adopted by the Verkhovna Rada at first reading, on the international automatic exchange of information on income earned from digital platforms.

In Popereshniuk’s view, bill No. 15111-d will lead to an increase in inspections, fines, legal disputes, corruption and shadow schemes.

"I cannot understand the logic of these actions, since the expected additional budget revenues from these innovations at around 1% could have been obtained by other, less toxic means," the Nova Poshta co-owner wrote.

As reported, the bill introduces a new VAT model for parcels worth up to EUR 150 purchased through electronic interfaces (platforms), whereby the obligation to calculate and pay VAT is placed directly on the marketplace or its intermediary in the case of non-resident companies. Marketplaces are exempt from issuing tax invoices and filing declarations for such transactions, but are required to keep detailed records of them. In cases where the seller is a non-resident, the tax amount will be determined in euros or US dollars, with the date of the obligation arising being the day payment is received from the buyer.

For non-commercial shipments between private individuals, a VAT exemption is provided for parcels worth up to EUR 45, on condition that they are free of charge and intended solely for personal or family use.