How to limit the abuse of the simplified taxation system was discussed during a roundtable organized by the Center for Economic Strategy together with the German Economic Group in Ukraine (GET).

The UAC Deputy Chairman Mykhailo Sokolov noted that a study on the extent of income understatement in the 1st, 2nd and 3rd groups of the simplified taxation system shows that the problem of turnover’s understatement by businessmans who are single tax payers of the 2nd tax group is actually serious.

"Their goal is not only to be able to work at the base of the 2nd tax group, despite of its non-compliance with the criteria, but also to be able to sell contraband or some products, which were made illegally without paying taxes, as some producers, who grow grain illegally, do. Therefore, we support the proposal to clarify the criteria for the 1st and 2nd tax groups, so that only really small enterprises, who sell produced products or services, can work in accordance with such tax groups," Mykhailo Sokolov said.

As for the GET’s proposal to oblige all single taxpayers of the 3rd group to be registered as VAT payers, caution should be used. Because this proposal is not justified for all product groups. And in most cases, it will only harm both business and the state, as administrative costs will exceed additional tax revenues.

"Moreover, the work of many small businesses may be blocked because the tax authorities will suspect them of fictitious tax credit emission. As long as they are not VAT payers, such a problem does not exist at all,” the UAC Deputy Chairman summed up.