Tax changes proposed by the Finance Ministry do not touch the simplified taxation scheme and it would be left unchanged, Ukrainian Finance Minister Oleksandr Danyliuk has told Interfax-Ukraine.

"This bill has nothing about the simplified taxation scheme," he said.

The minister said that the key goal of the tax amendments drawn up by the ministry is to solve problems of businesses via improving administration and to fix defects which appeared when the Tax Code was amended at the end of 2015. They are also aimed at creating the conditions for the reform of the State Fiscal Service. The reform includes the removal of the tax police and databases.

According to experts, rumors about the possibility of annulling the simplified taxation scheme appeared in connection with a proposal of the ministry to introduce the new taxation scheme for income from operations (including business operations) using the general taxation scheme. The ministry proposed to expand the current scheme with two categories: small individual operations and a 'relaxed' general system.

Small individual operations imply payment of individual income tax at the fixed rate for persons who are not registered as businessmen without a right to hire other persons. The category includes retail trade, provision of household services to the public, traditional arts and crafts (the list is approved by a local council) with annual income of up to 250 minimum wages set as of January 1 of the reporting year (UAH 344,500 in 2016). The tax rate for this category is 10% of minimum wage (UAH 137.80 per month in 2016).

The 'relaxed' general system foresees payment of individual income tax from profit. The category includes individual businessmen and individuals who are involved in independent professional activities. The annual income could be restricted to 4,000 minimum wages (UAH 5.512 million in 2016). The difference between revenue and expenses is taxed at the rate of 18%. It is paid every quarter in advance.