And let's reduce taxes in Ukraine? What will come out of it

Sergei Fursa Columnist, investment banker And let all taxes be 10-10-10? Beautiful let VAT be 10. Let the income tax be 10. And let the social tax be 10. Why 10? The figure is wonderful. The experience of Sri Lanka, where they reduced taxes and received a default, inspired Ukrainian populists. And now Balashov is not so lonely with his 5. 10. Although, in principle, he has never been lonely with his sect witnesses to abolish taxes, and now he should be jealous.

Still, strangers came to its original territory. It is even a meanwhile. The man for so long and cherished this niche, and here, they broke, touched on the digging. Video Day populists are different. We in Ukraine are used to traditional populists such as Yulia Vladimirovna. This traditional Ukrainian populism - let's give everyone more money. And everyone will be happy. At least some time. Then, of course, inflation and devaluation come, eats all income growth and makes people poorer.

Now we are not studying traditional populism. Let's reduce (and better cancel) taxes and will be happiness. It is said that reducing taxes will lead to an increase in payments, and no one will notice anything. Where and in what country of the world it was so - history is silent. Instead, a recent story in Sri Lanka clearly shows how quickly the default comes after a sharp unjustified tax reduction. That's right now they conducted an experiment, as if specifically for Ukraine.

And they received default and folk riots. And the president fled, however, not to Rostov, but to the Maldives. Because this does not lead to an increase in the economy. It just does not bring everything. Instead, the hole in the budget grows instantly. Therefore, debt increases sharply. So the default knocks on the door. A very simple and visual picture. And, by the way, as with the first type of populism, inflation and devaluation also come. Do you like the idea of ​​reducing taxes? Of course.

No one likes to pay taxes. In general. In any country in the world. And if you do not pay, it does not pay. Therefore, every businessman is always for tax reducing. Are high taxes a major problem in Ukraine? No. And even before the war it was not. According to the business itself, the absence of the rule of law. Courts, courts and once again courts. Well, security forces. The tax level has never been critical for business in Ukraine. And it was before the war.

Now during the war, the level of taxes does not play a role for business when making decisions. Business or feels safe. Or not. And if you start looking at taxes, first of all, it should be about the reform of the service itself, transforming it into a service function. But it is always easier to mathematically reduce taxes. And all for. And no corruption will suffer. And yes, during the war taxes do not reduce. The war is expensive. During the war, taxes raise. Unfortunately.

And it is very infantile to believe that it is possible to reduce taxes and wage war. So no one has succeeded in history. And it is important to remember. Western aid cannot be spent on the army. Only taxes go to the army. Well, a printing press. Does the business win if taxes are reduced? At first yes. Everything is here with classical populism. First, everyone likes everything. And then, when macroeconomic stability is destroyed, it ceases.

Ask the business in Sri Lanka, how do they have an investment climate during a default? Not to mention other participants in the process. Not entrepreneurs. After all, pensions should be taken from somewhere. And strangely enough, they are taken from taxes. Do you need to close the holes and fight the schemes? Of course. Can it increase budget revenues? Can theoretically. Maybe even strongly. But first let them grow. And we will see a terrible surplus of the Ukrainian budget.

And then we will decide what we do with this surplus. The reverse process is somewhat adventurous. And adventures with your economy during the war are a bad idea. And purely technically. If you be a pedant and boring. Reduce VAT to 10% is a violation of EU rules. It so happened that they set a minimum level of this tax at 15%. Reduce income tax by up to 10% is a violation of the G7 consensus decision on a minimum income tax of 15%, taken within the fight against offshore. Somehow it is uncomfortable.