09:47 15.11.2018

Govt proposes to Rada to lift upper limit for accruing single social security tax, introduces declining scale

2 min read
Govt proposes to Rada to lift upper limit for accruing single social security tax, introduces declining scale

The Cabinet of Ministers of Ukraine has approved a bill, which lifts the upper limit for accruing the single social security tax and introduces the declining scale for paying this tax in 2019. This means the reduction of the rate for wages exceeding 25 minimum wages (UAH 104,500).

An Interfax-Ukraine correspondent reported that the Cabinet of Ministers approved the corresponding bill at a meeting on Wednesday.

"The single social security tax rate for wages that exceed the limit of UAH 104,000 will decrease to as much as 5% for an amount that exceeds 270 minimum wages. It is also proposed to establish in the labor legislation the principle of differentiation of wages in enterprises," Social Policy Minister Andriy Reva said, presenting the bill in the government.

Reva said that along with this, it is proposed to strengthen the responsibility for nonpayment of the single social security tax.

He also said that 84,000 enterprise managers receive the minimum wage in Ukraine, 20,000 of them in Kyiv. Before the reduction in the rates of the single social security tax in 2016 from 38% to 22%, this figure was 28,000.

"Also, 75% of enterprises demonstrate an average salary - up to UAH 4,000, and this is the private sector... Skilled and unskilled labor is paid equally according to the documents," he said.

According to the estimates of the ministry, additional revenues to the budget from these measures may amount to UAH 10 billion.

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