The company "Textile Contact," part of Ukraine's largest light industry group TK Group, has announced that it does not plan to reduce employee salaries in response to the increase in the military tax.
"We have made a decision that will prevent the increase in the military tax from affecting employee compensation. The company will cover the difference resulting from the military tax hike using its own resources. This will allow us to maintain the planned salary levels unchanged and support our staff during these challenging times," the group's press service told Interfax-Ukraine.
Another company within TK Group, "TK-Domashny Textil," which encompasses several legal entities, also communicated its intention not to lower employee salaries.
"We are not considering the option of reducing salaries, as we recognize our responsibility to each employee. We have indexed employee wages to match the increase in the military tax," the company stated, adding that currently, a total of 615 people are employed across all enterprises under "TK-Domashny Textil."
"TK-Domashny Textil" emphasized that light industry enterprises were already facing tough conditions before this law was enacted.
"However, the law has been passed, and we must accept it. Previously, production profitability was at 7-8%. The increase in the military tax from 1.5% to 5% reduces the company's profit to 5%, which in turn decreases tax deductions to the state for corporate profit tax," they added.
As reported, a law came into effect in Ukraine on December 1, which includes an increase in the military tax from 1.5% to 5%.
Earlier, the European Business Association reported that more than half of the surveyed companies would be unable to compensate employees for the increase in the military tax, according to a rapid survey conducted among member companies.
"Textile Contact" brings together several sewing enterprises within the group ("TK-Style," "TK-Lubny," and "TK-Korosten"), as well as a chain of fabric supermarkets "TK-Market," an online store, a central warehouse, and an office.
According to opendatabot, in 2023, LLC "Textile Contact" more than doubled its net profit compared to 2022, reaching 44.5 million UAH, with a 24% increase in net income to 792 million UAH.
At the beginning of this year, the company employed 669 people.
"TK-Domashny Textil" is a leader in the production of fabrics, home textiles, and children's assortments in Ukraine. Its asset portfolio includes factories in Kyiv, Odesa, Ternopil; a shoe factory in Chyhyryn; a knitting production facility; and one of the few finishing factories in the country for cotton fabric production located in Chernihiv.
TK Group was founded in 1995. Currently, it represents a holding company that encompasses the full range of services in the textile industry—from raw materials and threads to ready-made solutions for B2B, B2G, and B2C clients.
The owner of the group is businessman Alexander Sokolovsky, head of the light industry defense procurement committee at the Federation of Employers of Ukraine, and a member of the public movement "Manifest 42."