Mykolaiv deputies ask authorities not to raise taxes for entrepreneurs

Deputies of the Mykolaiv City Council appealed to Ukrainian President Volodymyr Zelenskyy, the Verkhovna Rada, and the Cabinet of Ministers with a request not to increase the tax burden on local entrepreneurs.

The decision was supported at a session of the Mykolaiv City Council today, 3 February, according to NikVesti.

In particular, Mykolaiv City Council deputy Olena Kiseliova noted that due to the full-scale invasion, Mykolaiv lost part of its income due to the shutdown or reduction of business.

«It is entrepreneurs who ensure the economic stability of the state and pay taxes consistently. Since the start of the full-scale aggression, Mykolaiv has already lost a significant part of the community's income resources due to the shutdown or reduction of business activity. Individual entrepreneurs and legal entities that have opted for a simplified taxation system through a single tax payment without registering as VAT payers are a community resource that we, the deputies of the Mykolaiv City Council, must protect,» said Olena Kiseliova.

Text of the appeal of the members of the Mykolaiv City Council of the VIII convocation to the Verkhovna Rada of Ukraine and the Cabinet of Ministers of Ukraine regarding the prevention of an increase in the tax burden:

In turn, Mykolaiv City Council deputy Oleksandr Bereza noted that since the start of the full-scale war, Mykolaiv has been constantly shelled, forcing some businesses to shut down or relocate to safer regions.

«In such conditions, the city's vital functions depend particularly on the stable operation of small and medium-sized enterprises, which provide employment for the population of Mykolaiv, fill the local budget, support critical infrastructure and ensure the social stability of the community in conditions of martial law. The introduction of decisions that increase the tax burden, complicate administration, expand control functions or restrict the simplified taxation system could lead to a decline in entrepreneurial activity, job losses and a reduction in revenues to budgets at all levels,» said Oleksandr Bereza.

He added that support for small businesses is «a necessary prerequisite for the economic recovery of local communities».

«In this regard, we call on the Verkhovna Rada of Ukraine to refrain from adopting amendments to tax legislation that worsen the conditions for small businesses and sole proprietors, to preserve and guarantee the stability of the simplified taxation system, and to ensure a broad dialogue with local authorities, the business community and relevant associations, and to formulate tax policy taking into account the real economic situation of frontline and affected communities,» said Oleksandr Bereza.

Text of the appeal of the deputies of the Mykolaiv City Council of the VIII convocation to the President of Ukraine, the Verkhovna Rada of Ukraine and the Cabinet of Ministers of Ukraine regarding the prevention of an increase in the tax burden on entrepreneurs:

The deputies supported both appeals.

It should be noted that on 27 November, it became known that Ukraine had agreed to new requirements from the International Monetary Fund, which, in particular, provide for the abolition of some tax breaks. This is a condition for receiving the next IMF loan tranche.

In particular, it is planned to introduce an additional tax burden for individual entrepreneurs with an annual income of more than one million hryvnias — they will be required to pay value added tax.

This information was later officially confirmed by the IMF, which emphasised that Ukraine's compliance with the Fund's requirements is a necessary condition for the provision of an $8 billion loan.

In turn, the head of the parliamentary committee on finance, tax and customs policy, Danylo Hetmantsev, said that the introduction of value added tax for individual entrepreneurs was primarily the fault of «cunning» big business and insufficient work by tax authorities.

Recently, on 12 January, the Association of Ukrainian Cities appealed to the Cabinet of Ministers, the Verkhovna Rada and the President of Ukraine regarding the inadmissibility of introducing a mandatory value added tax for single tax payers.

The appeal emphasises that the introduction of VAT for the simplified taxation system could lead to the shadowing of business, job cuts and, as a result, a reduction in local budget revenues. The mayor of Mykolaiv, Oleksandr Sienkevych, also took part in this process.

Read the NikVesti article: «How business in Mykolaiv operates in conditions of power outages».