On January 15, 2026, the State Regulatory Service of Ukraine held a round table with the participation of representatives of the Ministry of Finance of Ukraine, the State Tax Service of Ukraine, and representatives of business associations, at which they discussed the draft Law of Ukraine “On Amendments to the Tax Code of Ukraine Regarding the Registration of Single Tax Payers as Value Added Tax Payers,” developed by the Ministry of Finance of Ukraine (on VAT for sole proprietors).

One of the main arguments of the Ministry of Finance for the implementation of this initiative is the thesis about the country’s European integration movement and the equalization of competitive conditions. Representatives of the business community cited the current thresholds applied in EU countries, which are significantly higher than those proposed by the Ministry of Finance.

Since the draft law and ARV were made public, many questions have arisen in the business community regarding cost calculations.

The ARV to the Ministry of Finance’s draft law states that the benefits of implementing the draft law will amount to approximately: UAH 40.1 billion (revenue) – UAH 0.179 billion (state expenditure) = UAH 39.9 billion, and additional expenditure by economic entities – UAH 2.09 billion/year, with no costs for citizens.

However, according to estimates by economists from independent analytical centers, the calculations in the published ARV do not correspond to current realities.

First, the additional expenses of the household sector (citizens) have not been taken into account. Since VAT is a tax on final consumption, additional budget revenues are planned to be obtained from the end consumer, who will pay these UAH 40 billion in VAT.

Secondly, administrative costs in the Ministry of Finance’s ARV are calculated based on the assumption (of unknown origin) that a business entity spends an additional 56 man-hours per year on VAT administration. This assumption is not true, because VAT payer status requires accounting, which is otherwise unnecessary for microbusinesses under their management model.

The World Bank’s Ukraine: 2024 Tax Compliance Cost Survey shows that Ukrainian businesses spent an average of only 74.4 days per year (595 man-hours) on tax administration.

A study of the state of tax administration in Ukraine, conducted by CASE Ukraine in 2025 based on a representative survey by Info Sapiens, shows that the actual average difference in labor costs for tax administration between single tax payers without VAT (but with hired employees) and with VAT is 140. 2 man-days per year – 20 times more than in the Ministry of Finance’s calculations.

Thirdly, the Ministry of Finance used the minimum wage to calculate the costs of ARV, although accounting is skilled work that is usually performed by an accountant who receives at least the average wage (but may work part-time).

The actual additional costs per entrepreneur (based on the average salary of a qualified accountant (UAH 26,000/month) and the required hours) = UAH 93,000 per year (according to WB data). For 660,000 entrepreneurs who, according to the Ministry of Finance’s estimates, will be affected by the new regulation, unproductive costs will amount to 61.4 (WB labor cost estimates, which do not take into account full accounting) or UAH 115.7 billion per year (labor cost estimates with full accounting – CASE, Info Sapiens).

Accordingly, the impact of the new draft law on public welfare is negative, as the potential fiscal effect (+40.1 billion UAH) does not even exceed administrative costs (-61..-115 billion UAH), which are net social losses that directly reduce public welfare.

Among the concerns raised by businesses were issues related to the blocking of tax invoices, audits, and complex VAT administration. Business associations emphasized that in order to introduce changes in tax legislation that would affect a significant portion of entrepreneurs subject to the single tax, it would be necessary to first simplify VAT accounting for the general system. At a meeting with businesses in December 2025, the Ministry of Finance presented a new concept for VAT administration for single tax payers, which is planned to be developed during 2026, but according to business representatives, these deadlines are unrealistic for the preparation of high-quality software for VAT administration. In addition, businesses predict a shortage of personnel: both qualified accountants for entrepreneurs and tax specialists involved in VAT administration processes.

Therefore, the business community is convinced that the Ministry of Finance’s initiative to introduce VAT for single tax payers in its proposed form will have a negative economic and social impact and should not be adopted.

Business representatives called on the Ministry of Finance to consider the proposals of the business community and analytical centers and find acceptable alternative ways to achieve the goals of state regulation for all parties.