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Expanding fiscal pressure on business is unfair and harmful - All-Ukrainian Professional Association of Entrepreneurs

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Any increase in fiscal pressure on business is unjustified and harmful, as it will impose significant costs on business, while additional revenues to the state budget will be minimal, said the president of the All-Ukrainian Professional Association of Entrepreneurs.

Any expansion of fiscal pressure on business is unjustified and harmful. This opinion was expressed during the congress "Public Finance Reform - the Way to Restore Ukraine" by the President of the All-Ukrainian Professional Association of Entrepreneurs Borys Emeldesh, UNN reports .

The introduction of payment transaction registers (PTRs) for individual entrepreneurs (IEs) was actively advocated by Danylo Hetmantsev, chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy. He noted that this is what the people of Ukraine need for development.

"Any expansion of tools that are extremely complicated for business  (cash registers, commodity accounting) is not justified and harmful, at least until the quality of institutions (in Ukraine - ed. )will be as good as in the developed EU countries... It is necessary to hear the voice of business and once again pay attention to fair fiscalization, because today the state institutions that form and are responsible for the formation of tax policy demonstrate complete and, unfortunately, deliberate disregard for any proposals, calculations and initiatives (of business - ed.)," Emeldesh said.

According to him, the total number of individual entrepreneurs is currently about 2 million. Of these, about 1 million were supposed to install cash registers, but only 327 thousand have actually installed them. "This means that entrepreneurs are massively ignoring this ridiculous rule," Emeldesh added.

He noted that experts have calculated the losses of individual entrepreneurs from total fiscalization. In particular, the costs of all individual entrepreneurs for cash registers amount to about UAH 10 billion per year, and the costs of complying with commodity accounting amount to UAH 25 billion per year. At the same time, additional budget revenues from the introduction of cash registers and compliance with commodity turnover, according to Emeldes, amount to about UAH 6-8 billion per year.

"It means that in order for the state to receive UAH 8 billion, businesses must lose UAH 35 billion. This is a socially negative regulation that is harmful to the country as a whole," Emeldes said, adding that the Ministry of Finance responded to an official request by saying that it was impossible to estimate the impact of cash registers on the economy.

ФОПи визначились: найбільш негативний вплив на розвиток підприємництва в Україні чинить Данило Гетманцев 20.12.23, 19:09

In addition, according to Emeldes, over the past four years, the State Tax Service (STS) has been conducting 27,000 inspections a year, and there are about 700,000 entrepreneurs who have not installed cash registers. "That is, in order to establish only the fact of this violation, the tax service must work for 25 years," he said.

Also, according to him, in 2023-2024, the level of shadowing of excisable goods shows abnormal results. In particular, in the tobacco industry, it is 19%, that is, every 5 packs of cigarettes sold is illegal, and in the alcohol industry, 38% is in the shadows. The total budget losses from the shadowing of these two groups of goods amount to UAH 25 billion per year.

"How will fiscalization of another million entrepreneurs help if the tax service cannot cope with tens of thousands (of companies - ed.) and bring these industries (tobacco and alcohol - ed.) out of the shadows?" Emeldesh asked.

Recall

Political strategist Serhiy Gaidai believesthat an increase in the tax burden on entrepreneurs will lead them to work in the shadows, and some may even immigrate from Ukraine. 

At the same time, businesswoman Yana Matviychuk said in an interview with UNN that Hetmantsev's tax policy would lead all small businesses in Ukraine into the abyss and lead to an even greater economic decline. 

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