KIEV: Ukraine took a huge leap in ease of paying taxes, vaulting 41 positions in the World Bank’s tax payment index, part of the Doing Business Ranking 2018. It now ranks 43rd among 190 countries, up from 84th a year earlier. Ukraine managed to improve its position because of several major changes to improve transparency and ease of payments. Among them are an automated and online value-added tax refund system, replacing a secretive and corrupt VAT system. Ukraine has also moved more tax payments online, making transactions easier and more transparent. All these changes “had a positive impact on our place in the taxpaying part of the ranking,” llya Neskhodovskiy, a tax expert at the Reanimation Package of Reforms think tank, told the Kyiv Post.
Despite the success in the tax payment part of the ranking, Ukraine managed to go only four positions higher in overall performance now 76th among 190 countries, up from 80th place in 2017. The latest World Bank’s Doing Business ranking, released in October, measures the ease of doing business and overall success of 190 economies of the world. An average company in Ukraine pays 37 percent of its profits in taxes. The average for Europe and Central Asia is 33.1 percent of income and 40 percent in high income countries. But companies in 32 economies ranked pay only 18 percent. Neskhodovskiy said that the decrease of the unified social tax from 41 percent to 22 percent in 2016 helped Ukraine to move from one of the highest tax burdens to the middle of the pack. Although the ranking analyzed the 2016 performance of the countries, we already had the automatic VAT refund system working then. It has been improved since then but still is not perfect,” Neskhodovskiy said. The government reported that, in November and December 2017, the automatic VAT refund system paid more than Hr 4 billion to 3,000 Ukrainian enterprises that filed for reimbursement to the Finance Ministry.
