Taxation Bill on International Packages Sparks Controversy Among Lawmakers and Businesses

The proposed bill, designated as number 15112, aims to amend the Tax Code regarding the taxation of electronic commerce operations with VAT. Zheleznyak emphasized that the legislation would eliminate the current exemption for international packages. "As it stands, our country receives approximately 90 million packages annually, and the majority of these (about 99%) are valued at less than 150 euros. These packages are currently exempt from VAT, which is 20%, and customs duties, which range from 5% to 10%. The government is now proposing to remove this exemption, meaning that every package would be taxed, resulting in a minimum price increase of 20% or more for each package," Zheleznyak highlighted, reiterating the essence of the government’s proposal.

Furthermore, the MP pointed out that the bill does not enjoy unanimous support within the business community. "I have seen the stance of some businesses that support this provision, arguing that it distorts competition from their perspective. Conversely, I have also encountered businesses that are against it. For instance, Volodymyr Poperyshnyuk, co-owner of Nova Poshta, has voiced his opposition," he added.

Zheleznyak also criticized the bill as flawed and in need of further refinement, stating that "it is unrealistic to implement this customs system within six months." He explained that instead of processing approximately 600,000 packages per year, the government would have to manage and tax 90 million packages. "The customs service simply does not have the capacity for this. This is an obvious fact," the MP concluded.

When assessing the chances of the bill's passage, Zheleznyak indicated that they stand at 50-50. This suggests that the situation remains uncertain, with much depending on further discussions and the positions of other lawmakers.

Earlier reports indicated that on April 6, a meeting took place between representatives of the Cabinet and deputies from the Servant of the People faction, where the adoption of tax bills was discussed. Government sources revealed the agreements reached between officials and lawmakers. Notably, Andriy Motovylovets, deputy head of the Servant of the People faction, stated that deputies would focus on reviewing three tax bills submitted by the Cabinet during the plenary week from April 7 to 9.

The bills in question include: taxation on digital platforms (number 15111, known as the OLX law), an extension of the military tax at 5% for three years post-war (number 15110), and the cancellation of VAT exemptions on imported packages valued at up to 150 euros (number 15112). These initiatives are generating lively discussions, as their implementation could significantly impact the e-commerce market and business landscape in Ukraine.