11:55 27.11.2015

Basic draft 2016 budget without tax reform does not include 40% in single social security tax - Jaresko

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Basic draft 2016 budget without tax reform does not include 40% in single social security tax - Jaresko

The basis draft 2016 national budget of Ukraine formed without taking tax reform into account does not include a 40% cut in single social security tax from January 1, 2016 which has been agreed with the International Monetary Fund (IMF) and parliamentary factions, Finance Minister of Ukraine Natalie Jaresko has said.

"This step was agreed with all the participants of the political process, particularly, the Verkhovna Rada, when the bill on the experiment regarding single social security tax was agreed in December 2014 and then re-approved during the discussion of the memorandum with the IMF with our partners in the coalition," Jaresko wrote in an op-ed article in the Ukrainska Pravda publication.

The minister said that along with her, the document was signed by the president, prime minister, and the governor of the National Bank of Ukraine (NBU).

Jaresko said that the necessity of revoking the coefficient of 0.6 on social security tax rates from 2016 is because the experiment on cutting single social security tax this year did not result in the expected reduction of the shadow market.

The minister repeated her calls for lawmakers to pass the government's version of the draft 2016 budget drawn up on the basis of the tax reform designed by the Finance Ministry that foresees the halving of the single social security tax rate.

As reported, chair of the parliamentary committee for tax and customs policy Nina Yuzhanina, who submitted an alternative plan for draft tax reform to the parliament with other lawmakers, had said that the refusal to cut the single social security tax by 40% would never be approved by the parliament.

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