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Expert commentary

MPs Want to Abolish VAT: Will Products Be Cheaper And How It Threatens Country`s Budget

13.12.2016 Verkhovna Rada registered a draft law №5401 named ‘On the Abolition a Value Added Tax in Ukraine’. As its authors explain, VAT is corrupt and discriminatory one. According to CASE Ukraine`s Senior Economist Volodymyr Dubrovsky, this is done to prevent the Ministry of Finance of Ukraine to submit its own draft.

According to the CASE Ukraine`s senior economist Volodymyr Dubrovsky, this bill is submitted to prevent the Ministry of Finance`s bill, that has closed most of the existing VAT refund schemes. In Ukraine, moreover, there are other taxes that, in his opinion, should be abolished.

‘It is just the Ministry of Finance has prepared a bill that largely removes the majority of the existing schemes. That includes closing the practices with doubtful exporter`s VAT non-returns, when one has to pay bribes for VAT refund. Rather, this bill is registered to hinder this process. VAT is not the most harmful tax among other ones. The most harmful taxes are the unified social and the corporate income taxes. VAT at least is not so noticeable for businesses. It is used in more than 130 countries in the world, and there is a large international experience on how to combat corruption, the economist said.oject.