The Chamber of Tax Advisors of Ukraine Supports Small Business Interests

Experts of the Chamber prepared the document which sets out an analysis of the implications of the adoption of the Draft Budget for the 2014 standards concerning the mandatory use of cash registers for single tax payers 1, 2 and 3 groups.

The Draft Law of Ukraine «On the State Budget of Ukraine for the Year 2014» proposes amendments to subparagraph 296.1.1, paragraph 296.1 of Article 296 of the Tax Code of Ukraine, which introduces the obligation for tax-payers under the simplified system of taxation to keep a Book of the account of incomes and expenses, the introduction for tax-payers under the simplified system of taxation of the first - third groups who carry out the sale of certain product groups, the obligatory usage of cash registrars and mandatory accounting of inventories on the basis of a customs declarations or a document substituting for groups of goods imported into the custom territory of Ukraine.

The suggested amendments make the regulation of business activity more complicated and may lead to irreparable consequences for the economy of country in whole. In particular, concerning amendments the following should be noted.

According to Article 291.2. of the Tax Code of Ukraine the simplified system of taxation, accounting and reporting is a special mechanism for levying taxes, which establishes the replacement of the payment of certain taxes and charges on payment of the unified tax, with the application of simplified accounting and reporting procedures at the same time.

According to Art. 293 of the Tax Code of Ukraine the tax payers of the unified tax of 1-3 group shall pay the tax in a fixed form, and the amount of the unified tax is not related to the amount of the revenues. Total revenue only influences the possibility of the entrepreneur to enjoy the selected group of the simplified tax regime. These regulations are aimed to simplify maximum the business activities at the level of micro- and small businesses.

Thus the explanation that obligatory usage of cash registers in business activity of private entrepreneurs of 1-3 group under the simplified taxation system will significantly fulfill of the budget is, to put it mildly, doubtful. There are many arguments to consider, that on the contrary, the number of micro- and small businesses considerably can decrease at the same time of implementation of the proposed changes.

For the full text of document please refer to Ukrainian or Russian version of the Chamber of Tax Advisors website.