Ukraine ranks 65th in the Paying Taxes 2020 ranking

Ukraine ranked 65th in the annual research Paying Taxes 2020. During the year, the country dropped by 11 positions.

The ranking is compiled by PwC in cooperation with the World Bank Group. It evaluates the ease of paying taxes across 190 economies.

Reasons for dropping

According to PwC experts, the reasons are the following:

• Active actions of other countries to automate processes and reduce the time of tax administration.
• Increasing the tax burden on businesses.

How to strengthened the positions

Ukraine is currently working on a plan for the digitalization of the tax system. The main task of the new reform should be to reduce the time that businesses spend on accounting and payments to the budget. This goal can be achieved through:

• Implementation of electronic document flow.
• Simplification of tax reporting forms.
• Automation of tax returns preliminary filling in.
• Real-time reporting.

Currently, domestic businesses spend on average 328 hours per year for accounting, which is more than in other neighboring countries:

• Germany – 218 hours.
• Belarus – 170 hours.
• Slovakia – 192 hours.

Other countries

• Turkey has improved its position from 80th to 20th. This was due to the canceling VAT for capital investments.
• Hungary moved up from 86th to 56th position by reducing the time for a tax audit due to a corporate tax return adjustment.
• Portugal, Poland, Lithuania introduced real-time reporting to tax authorities.
• Kazakhstan has launched a pilot project of deploying blockchain for VAT administration. The United Kingdom is also considering such an opportunity.