06.11.2010 | Yevhen Zakharov

Proposed Tax Code kills Freedom


The authors of the draft Tax Code claim that their aim is to prevent minimization of taxes and establish optimum levels. Yet the methods proposed for achieving this end are simply devastating and will deprive millions of Ukrainians of the opportunity of working.

We can take the proposals regarding small businesses which have a simplified system for taxing their accounts. The draft code proposes a considerable reduction in the types of activity where the simplified system can be applied.

For those that remain on this list, the single tax rate would be several times higher, while double again for those carrying out business or providing services not only at the place they are registered.

This means that millions of people in Ukraine – programmers and other IT specialists, designers, artists, musicians, accountants, auditors, translators, lawyers, engineers, academics, small-scale producers and others will be deprived, through this Tax Code, of working freelance according to their wish and preference.

Yet it is those people engaging in diverse forms of small-scale business etc who make up the rich tapestry of the world. This means discriminating against people who are capable of acting independently, using their intelligence, their abilities and skills to earn a living. 

Their choice will be seriously narrowed: either to join the grey economy (which is repugnant and, in fact, impossible) or become hired employees, and this when in Ukraine the relations between owners and employees are often similar to feudal relations (and for a free person there is nothing more terrible than to depend on the will of another person), or to emigrate.

We can forget about a market for free professions in Ukraine. Can the government seriously want people who independently earn a living for themselves and their family to leave the country?

The government constantly repeats statements about its wish to reform the economy; create new jobs’ foster the development of modern technologies and intellectual production. Yet with its draft Tax Code the government will achieve the opposite effect.

Furthermore the basis for taxation will collapse, and this is when the budget deficit now stands at 15%, and the government’s debt on social payments is a third of the budget.

What is the government counting on? What does it want?  New serfdom? Is it really not clear that such attempts are today doomed?

If these norms are passed by the Verkhovna Rada, it will be a death sentence to free enterprise and economic independence in Ukraine. The proposed changes flagrantly violate the right of millions to work. People engaged in enterprise will lose freedom of choice of type of work and conditions and will effectively not be able to freely choose their way of life. A person’s right to choose his or her own fate which covers the entire range of human rights and freedoms will be significantly violated.

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