Currently, the relevant committee has recommended that the parliament adopt the revised draft law in the first reading. This was announced by MP Yaroslav Zheleznyak.

He also noted that several significant changes have been made to the text of the document, including a new tax increase on banks.

Main changes in the draft law

One of the main updates is the introduction of an increased military duty rate for a wide range of taxpayers. According to the proposals, the military duty is to be increased from 1.5% to 5% for most individuals.

In addition, an additional military fee of 1% of income is to be introduced for single tax payers of the third group.

For individual entrepreneurs (IEs) belonging to the I, II and IV groups of the single tax, a military tax rate of 10% of the minimum wage is introduced. This creates an additional tax burden on small and medium-sized businesses, but is aimed at supporting the military needs of the state.

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Taxes for banks and financial institutions

The previous version of the draft law provided for an increase in the corporate tax rate for banks to 50%, but this provision was removed. However, in the new version, it is being reintroduced for banks, but only for 2024. This increase could have a significant impact on the banking sector, creating new challenges for financial institutions.

For non-bank financial institutions, except for insurance companies, the document provides for the introduction of a 25% corporate income tax rate, which also changes their tax policy for the coming years.

The document also contains a provision concerning gas stations. It provides for improvements to the model for determining advance payments of corporate income tax, which is aimed at increasing transparency and efficiency of tax payments in this sector.

The draft law provides for changes in the timing of tax reporting. Instead of a quarterly tax period, a monthly period will be introduced for reporting on income paid to individuals. This will facilitate more prompt reporting, especially in the context of economic booking.

According to MP Yaroslav Zheleznyak, such tax changes could bring UAH 58 billion to the state budget in 2023, and UAH 137 billion is expected to be received in the next year, 2024.

Voting for the draft law in the first reading is expected in the coming days, and if passed, these changes will be an important step in increasing tax revenues to the budget, which is especially important in the context of war and economic challenges for the country.