Statement of the American Chamber of Commerce in Ukraine on Governmental Initiative on the Single Social Contribution

Transparent, predictable, fair and equal taxation policy has always been a priority for the Member Companies of the American Chamber of Commerce in Ukraine. We would like to express our concern with regard to the recent decision of the Cabinet of Ministers of Ukraine on approval of further registration and consideration by the Parliament of Ukraine of the Draft Law on the functioning of the system of compulsory state social and pension insurance, as well as quality of administration and discipline for paying a single social contribution. The indicated legislative initiative may lead to a number of negative consequences, in particular, additional pressure on bona fide taxpayers, instead of implementing effective measures to combat the "shadow" economy.

Such initiative can offset the effect of decreasing the rate of single social contribution from 41% to 22% at the beginning of 2016, which was one of the tangible steps taken by the State for the transparent businesses and allowed our country to improve its position in terms of investment attractiveness.

In addition, since most companies have already approved their budgets for 2019, an unpredictable increase in tax burden can lead to staff reduction, reviewing and adjusting plans for further increase of employees’ wages.

We are not looking for privileges, but we seek justice. Taking into account the significant negative impact the proposed changes may result in and the above-mentioned risks, experts of the Chamber Member Companies urge the Government of Ukraine to reconsider the decision and call the Parliament of Ukraine not to support such provisions of the Draft Law in case of its registration.