VATLive > Blog > European News > Ukraine abandons VAT cut plans - Avalara

Ukraine abandons VAT cut plans


Ukraine abandons VAT cut plans

Ukraine's plans to reduce its VAT rate from 20% to 17% are to be abandoned as the economy stalls.

VAT and corporation tax cuts reversed as economy slides

Ukraine had planned to lower its VAT rate whilst also cutting its corporation tax rate too, backed by one of the country's principle creditors, the International Monetary Fund.  However, the economy has slowed since the 2010 announcement, leading the IMF to question whether the tax cuts should go ahead as state revenues fell by over 3% since last year alone, and growth is expected to be zero this year.

The faltering economy and failure to delivery on the consumption tax cut will create additional political tension in Ukraine.  It is keen to move away from the Russian trade influence, and work towards membership of the European Union.  This includes anti-corruption measures, and the blocking of various tax loopholes.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.