Ukraine’s policy discussion on de-shadowing the economy is moving toward alternative mechanisms that can increase budget revenues without introducing blanket VAT pressure on sole proprietors.
Business associations argue that formal SMEs should not absorb disproportional tax burdens while large-scale abuse channels remain under-addressed. The focus is on targeted solutions: closing loopholes, improving risk-based control, and limiting misuse of simplified tax regimes by larger structures.
Policy direction under discussion
- Strengthening anti-abuse enforcement rather than broad tax expansion for compliant FOPs.
- Reducing contraband and tax-avoidance leakage in high-risk segments.
- Building predictable rules that preserve small business viability.
The government’s current position signals no immediate VAT rollout for sole proprietors, while searching for fiscal alternatives for medium-term budget planning.
For the market, the key issue is implementation quality: effective de-shadowing depends on precision, not on uniform pressure across all taxpayer groups.
