The next convocation of the Verkhovna Rada, in the post-war period, will have to adopt a progressive income tax scale for individuals, believes the head of the parliamentary committee on finance, tax, and customs policy, Daniil Getmantsev.
"In this scale, some parts will be above 18%, while others will be below. I think this is absolutely the right decision that we are already prepared for," said the committee head in an interview with the Interfax-Ukraine agency.
Commenting on the likelihood of maintaining the recently increased military tax rate from 1.5% to 5% after the war, Getmantsev emphasized that the duration of this increase is clearly defined – until the end of martial law.
"The term is unequivocally defined; there is no need for any changes in the law, nor any discussions – these 3.5% will disappear on their own," he noted.
In response to a question about how employers will react to the increase in military tax – whether they will fully pass it onto employees or compensate with a corresponding salary increase – Getmantsev expressed the opinion that this will be determined by the balance of supply and demand in the labor market, which currently faces structural problems and structural unemployment in Ukraine: there is a shortage of highly qualified workers, while overall unemployment has doubled compared to peacetime, reaching 18.2% by the end of last year.
"For scarce professions, I do not rule out that the employer will absorb this increase. Regarding those professions where demand is lower than supply, the employee will likely bear the burden," suggested the committee head.
Getmantsev also categorically rejected the notion that raising the military tax to 5% and several other taxes could lead to an increase in the shadow economy.
"These are completely senseless manipulative discussions from pseudo-experts about the law provoking shadow activities. I am even embarrassed to comment that an increase of 'as much as' 3.5% in the military tax would drive people into the shadows. We know that shadow salaries have been one of the most common schemes for tax evasion throughout all the years of independence. Therefore, this will not affect the shadowing in any way," he believes.
The committee head emphasized that, on the contrary, there is currently a strong trend towards the de-shadowing of salaries, which is linked to several factors.
"First, it is the position of responsible businesses that are purposefully coming out of the shadows and completely rejecting tax evasion schemes. Secondly, it is the issue of exemption from mobilization, where the average salary requirement is currently set at 20,000 UAH," noted Getmantsev.
He added that the role of the tax service in de-shadowing salaries is also important, as it is one of their priorities in their work.
"Companies are very well aware that if their salary is below the industry average, it is one of the criteria for being intensively monitored at the level of tax control," explained the committee head.