More than a third of Ukrainian businesses (36%) believe that the current tax regime in the country hinders their development and investment attraction. This is evidenced by the results of the annual study of the European Business Association “Tax Index”.
The majority of companies – 59% – assessed the current tax regime in Ukraine as satisfactory, 5% – as one that promotes business development. In general, the integral assessment of the “Tax Index” decreased to 2.64 points out of 5 possible and continues to be in the negative plane. In 2023, the index score was 2.85 points. Only once, in 2021, did the assessment of the taxation system reach a neutral indicator, the EBA notes.
The lowest score among the factors influencing the calculation of the index, as in the previous year, was received by the quality of tax legislation – 2.46 points (in 2023 – 2.63). Half of the respondents, namely 52%, consider it satisfactory. At the same time, the share of experts who consider tax legislation to be of poor quality has increased from 39% to the current 43%, respectively, the number of those who consider it to be of good quality has decreased – from 9% to the current 5%. The greatest negative impact on the quality of legislation, according to respondents, is caused by constant changes, contradictions and ambiguous provisions, and its complexity.
44% of respondents consider the procedure for tax administration and preparation of tax reporting to be burdensome. This year, this factor received a score of 2.62 points. At the same time, 41% assess this procedure satisfactorily and only 15% consider it easy (17% in 2023).
Businesses complain most about the amount of time spent on preparing tax reporting and paying taxes, the hasty introduction of new rules and the lack of time to adapt to them, as well as their incomprehensibility.
The assessment of the quality of tax services has also decreased – from last year’s 3.03 to the current 2.79 points. Only 20% are satisfied with the quality of tax services (31% in 2023), 37% are dissatisfied (21% in 2023). Another 43% assess the quality of tax services satisfactorily.
According to 31% of respondents, it was easy for them to contact the tax service (last year there were 46%), while 25% found it difficult to do so. In 11% of the surveyed companies, the issues were resolved satisfactorily, in 70% – partially.
The survey participants reported an increase in fiscal pressure on business compared to last year. Among the components of the index, it was the assessment of fiscal pressure that showed the greatest drop, however, remaining quite high compared to other components. Accordingly, the assessment of fiscal pressure decreased from 3.07 to 2.7 points. Only 7% of respondents did not feel any pressure on their company in 2024, 14% almost did not feel it. At the same time, 41% report significant fiscal pressure, 38% – moderate.
Traditionally, among the manifestations of fiscal pressure, businesses have highlighted unjustified interpretations of tax legislation by regulatory authorities – this is reported by 78% of respondents. The number of complaints about unjustified information requests (64%) and artificial blocking of tax invoices (30%) has increased significantly. 33% of surveyed companies report tax audits.
