The authorities have taken Ukrainians' incomes seriously: a bill by MPs Yuriy Lutsenko and Oleksandr Kirsh, "On a Zero Declaration," has been included on the Verkhovna Rada agenda. It requires all adult citizens to soon submit not only their annual income but also their expenses to the State Fiscal Service, according to the newspaper Segodnya.
And if it turns out that someone spent more than they earned, they'll have to not only explain to the tax authorities where the money came from, but also pay taxes on it. President Petro Poroshenko has already stated that he hopes the bill will be considered soon and supported by the parliament.
According to the bill, once approved, every Ukrainian will be required to personally (!) complete, deliver, or mail to the State Fiscal Service a so-called zero declaration: it must indicate what they own (business, real estate, land, vehicles, jewelry, bank deposits, cash, etc.).
Tax authorities won't ask how you accumulated your wealth—this data will be taken simply as a "baseline." But starting next year, everyone will have to show tax authorities not only their income (business profits, salary, interest on deposits, income from the sale of property, gifts, including cash, etc.) and the amount of taxes paid on them, but also, most importantly, their expenses. If it turns out that taxes have been underpaid, tax authorities will assess additional amounts.
If expenses exceed income, you'll have to provide a compelling explanation: why, say, you earned 100 UAH per year, but spent only 200? If you can't prove that taxes on this additional income have already been paid, you'll be required to pay a tax of 21% of the excess amount, plus 22% for the unified social contribution. Of course, this can only be determined if the newly acquired property (real estate, vehicles, land) is subject to registration.
"All Ukrainian citizens, regardless of income, will be required to file a declaration of all property they own and all income they have," explained Yury Lutsenko. "If these funds are in a bank account, they must be disclosed. This way, no one will be able to say they 'borrowed money from their mother-in-law.'" Lutsenko is confident that implementing the law will attract shadow money into the economy, generate additional revenue for the state budget, and improve the investment climate.
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