The Verkhovna Rada registered the draft law “On amendments to the Tax code of Ukraine regarding exemption from taxation of deposits of the population”.
As noted in the explanatory note to the document, from January 1, 2017 Law “On amendments to the Tax code of Ukraine concerning improvement of investment climate in Ukraine” provides that the basic rate of tax on income from deposits is set at 18%. In addition, each Bank investor shall be obligated to pay another 1.5% military tax.
“These legislative amendments are contrary to the concept of restoring the banking system and the return of capital. Confidence in the banking system in Ukraine is quite low, so to raise funds for the deposits are set high interest rates, and this problem will only be exacerbated by the taxation of income. Today tax rates on the interest accrued on the Deposit amount, for many people negates the very meaning of such investment, contribute to the outflow of funds from the banking system and keeping money “under the mattress”, – stated in the explanatory Memorandum.
The repeal of the tax on income from deposits, according to deputies, may indirectly contribute to lower rates on loans, because it will allow some banks to lower interest rates and cheaper to obtain funds from depositors.
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The bill proposes to set a zero tax rate for interest on current or Deposit Bank account, Deposit (deposits) in credit unions, and interest or discount income on nominal savings (Deposit) certificates.