On July 1, the Verkhovna Rada of Ukraine approved in the first reading a government bill providing an increase in tax rates and excise duties for businesses and citizens.

New tax code updates come with risks and pitfalls, argues MP Nina Yuzhanina ahead of the 2nd reading of the law in the parliament.

Yuzhanina calls into question new tax policy that pushes to bar executives of indebted companies from international travel. The restriction will allow courts to interfere and issue bans on trips abroad for senior management.

‘This does not stimulate enterprises to improve financial and economic performance (according to the logic of the Ministry of Finance), but restricts the rights and freedoms of citizens. That is, it turns out that optimization companies will be able to fire managers and appoint anyone with a passport, even the homeless, and highly qualified managers will be deprived of the right to travel abroad. It will not give anything for the budget’, – the MP states.

She also argues the policy will put a strain on small and medium business allowing to write off debts without a proper court ruling, The tax update also faces criticism over a new norm allowing to write off debts of companies without a proper court ruling, which will eventually add more woes to small and medium businesses.

‘Will funds be extracted from taxpayers’ accounts without a court decision on the 91st day of tax debt non-payment? Yes, they will. Today, the total amount of tax debt is UAH 17.8 billion. The tax authorities say this norm will not apply to private individuals, but it is a lie. The worst thing is that the medium businesses with small amounts of debt will suffer the most from this norm’, Yuzhanina claims.