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Draft Law of Ukraine “On the Uniform Social Tax” This draft suggests introducing the uniform social tax that will include deductions (fees) to be contributed to the State Pension Fund, Fund for State Social Insurance against temporary loss of ability to work and expenses resulting from birth or burying, Fund for State Social Insurance Against Unemployment, State Medical Insurance Fund. Contributions for obligatory medical insurance will be included into the uniform social tax from the moment the Law of Ukraine "On Compulsory State Medical Insurance" takes effect. Tax bodies will exercise control over payment of the unified social tax. The said proposals are to simplify the process of payment of the above contributions by employers. The purpose of this draft law is to reduce funds for administering by control bodies. But such positive effect is not likely to take place, because this draft envisages leaving the current order of payment of contributions (fees) to the pension and social funds unchanged for natural persons. It means, that in future employers will have to calculate and report on contributions (fees) to the said funds, which are deducted from employees’ wages. Depending on the amounts of actual costs for remuneration of labor of hired workers, there shall be applied the following rates of the unified social tax:
Regressive nature of this scale is anticipated to stimulate increase of wages because the deceased deductions to be made from wages fund. At the same time this draft provides for cancellation of the ceiling amount for remuneration of labor from which insurance contributions (fees) to social funds (now it is UAH 2,200.00) shall be made. This shall ensure additional incomings to pension and social funds. The Law will come into force (if the draft is adopted) simultaneously with law of Ukraine "On Personal Income Tax". | ||||||||||||||||||
Summary is prepared by Yaroslav the Wise Institute of Legal Information. O 2002-2004. Yaroslav the Wise Institute of Legal Information. All rights for the provided information are protected in accordance with the legislation of Ukraine. Reference to Yaroslav the Wise Institute of Legal Information is obligatory when making use of these materials. tel/fax (380-44) 254-00-00 www.welcometo.kiev.ua e-mail: ili@ili.kiev.ua |
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