The Ukrainian Agri Council, as part of the Ukrainian Business Council, which includes 112 business associations from various sectors of the economy, appealed to President Volodymyr Zelenskyy, Prime Minister Denys Shmyhal and MPs to reconsider a number of points of the National Revenue Strategy (NRS) until 2030, which defines the direction of tax and customs reforms in Ukraine during the war and after its end.

In particular, the UAC opposes the proposal to abolish the simplified taxation system for the agricultural sector. We believe that under the current circumstances, such an initiative will lead to a decrease in budget revenues at all levels, rather than an increase, as envisaged by the strategy. Since the beginning of Russia's full-scale invasion of Ukraine, farmers have been unable to sell most traditional agricultural products above cost. This is due to the complication and increase in the cost of logistics routes in Ukraine.

"According to the Ministry of Agrarian Policy, the production of most agricultural crops is currently completely unprofitable. At the same time, farmers continue to pay a fixed tax (as a fee for simplified accounting), and in the case of income tax, they would not pay anything. At the same time, in the post-war period, the abolition of the simplified system will lead to the loss of competitiveness of Ukrainian farmers compared to farmers in other countries, unless they receive similar conditions for subsidies as in the EU (from EUR250 per hectare of land under cultivation)," is mentioned in the statement.

The members of the Ukrainian Business Council also call for a revision of a number of points of the strategy related to taxation and the work of regulatory authorities, in particular:

• Authorizing the State Tax Service to seize accounts (property) and block them until the tax debt is fully repaid without a court decision. This approach carries significant corruption risks and violates the principle of presumption of innocence.
• Introduction of a progressive personal income tax on individuals. This proposal is counterproductive, as its implementation will reduce incentives to work, complicate tax administration and violate the principle of fairness, and increase illegal activity.   
• Complicating the conditions for the simplified taxation system instead of simplifying the general taxation system. A significant number of business entities under the simplified taxation system have chosen this path precisely for the sake of ease of business and administration, as the complexity of tax legislation and the significant risks of the general taxation system are not appropriate for small and microbusinesses.
• Narrowing the scope of the simplified taxation system by excluding legal entities, increasing effective tax rates to the level of the general regime (19.5%), while complicating tax compliance, accounting and reporting procedures. Ukraine runs the risk of losing innovative industries that have grown thanks to the simplified taxation system incentives.
• Increase in excise taxes on fuel. It will increase logistics costs for the entire economy and significantly raise prices for citizens and businesses.
• Giving the State Tax Service full access to information on the volume and turnover of funds of all taxpayers, including individuals, in their bank accounts (without a court decision and criminal proceedings). Contrary to EU practice, creates significant corruption risks and will lead to a violation of
• Lack of qualitative indicators of the order of implementation of the National revenue strategy. This will make it difficult to monitor the implementation of the strategy and evaluate its effectiveness.
• Concentration of efforts exclusively on increasing budget revenues, without assessing the loss of economic growth.

"Overly complicated and unfriendly tax legislation is not able to serve the war-weakened economy and facilitate a rapid economic recovery. Expanding the discretionary powers of regulatory authorities and complicating administration will provoke an even more aggressive model of interaction between the State Tax Service and taxpayers," the members of the Ukrainian Business Council emphasized.

At the same time, the strategy also contains a number of important points for implementation that business representatives have been waiting for many years. These include minimizing corruption, digitalization, and steps towards integration with EU legislation.

The Ukrainian Business Council calls on the Cabinet of Ministers and MPs to organize a discussion of the National Revenue Strategy with the participation of experts and business associations, provide economic justification for the points of the Strategy mentioned in the appeal, and take into account the proposals of Ukrainian business.

Based on the results of the discussions and calculations, the Ukrainian Business Council calls for a revision of the National Strategy in a number of points and for the Cabinet of Ministers to adopt an updated qualitative version of the National Revenue Strategy.