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Who Is the Most Loyal To the Tax Evasion?

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Investment banker Serhiy Fursa accused Ukrainians of not desiring to pay taxes. In his opinion, it is the middle class, which does not want to pay it. CASE Ukraine`s senior economist Volodymyr Dubrovsky denied this statement.

He said: ‘In the United States and some EU countries, the main part of taxes is indeed paid by the middle class, but only because it makes up 80% of the population, receives more than 50% of all revenues, and consumes 90% of all goods/services. It will be good for Ukraine to have at least 10% of the population. Ukrainian middle class, in addition, pays VAT and excise taxes’.

The expert recalled that the vast majority of our economy is a large and very large business that evade taxes on a large scale. Therefore, even if the middle class did not pay direct taxes at all, the budget would not feel it.

The economist also noted that Ukraine collects a lot of taxes, and for example more than in Germany. That the fact that the overwhelming majority of citizens lives in poverty – at least in our case – is by no means the result of low tax collection.

According to him, the budget loses due to Ukrainian oligarchs-led offshore schemes UAH 50-65 Billion, UAH 25-70 Billion due to smuggling. Conversion centers, tax ‘twists’ and counterfeits bring off the radar about UAH 45 Billion. Then, the underpayment of taxes from small businesses and ordinary people does not exceed UAH 10 Billion.

October 9, 2017