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Vadym Morokhovskyy: "The tax system must be changed dramatically"

The war with Russia has shown the strength of Ukrainian business. And for this business to be able to exist and develop, the taxation system needs to be radically changed. This opinion was expressed by Vadym Morokhovskyy, Co-Chairman of Odesa Business Club and Chairman of the Board of Vostok Bank, during the panel discussion "New Country - Regional Dimensions: Opportunities and Challenges" held in Odesa on 25 August at the invitation of Odesa Business Club. Vadym Morokhovskyy, Co-Chairman of Odesa Business Club and Chairman of the Board of Vostok Bank. 

Vadym Morokhovskyy: "The tax system must be changed dramatically"

"There was a small discussion at Princeton University, and when I told them how businesses continue to be built today, how relocation is taking place, how we live and survive in general, people did not believe that this was possible, given the horror that is happening in our country.

And this is because our business has gone through gigantic obstacles over the 30 years of independence. And we mimicked so much... Harrison has a book called Deathworld. And our business is not dead. No matter what happens, we will survive. And I think that our country's chance is that business, real business, has the opportunity to develop," said Vadym Morokhovskyy. Moreover, he said, there are good examples of cooperation between government agencies and businessmen.

"You may recall the program for cash distribution in Silpo, which we did together - Privatbank, Vostok Bank, the National Bank, the Ministry of Economy. Today, it takes two and a half months for programmers to complete the task that took two days back then. Back then, cash was already being issued at all cash desks in two days. It was very important to ensure this. And in terms of speed, this moment can be included in the Guinness Book of Records," said the Chairman of the Board of Vostok Bank.

No matter what type of recovery Ukraine follows - Asian (following the example of South Korea or Japan), European (Germany), or Israeli - local businessmen played the first fiddle in these countries, Morokhovskyy noted.

"Yes, there was help, there was the famous Marshall Plan, but who implemented it? Local businessmen who did not leave, were born and lived there, and their children will live there. This is our chance," says the co-chair of Odesa Business Club.

And the first thing he believes needs to be changed is the taxation system.

"The taxation system must change dramatically compared to what it is today. We cannot live in anarchy. A democratic state should allow businesses to easily understand their tax base, and it should control tax payments as easily and automatically as possible. All countries live on taxes. They should be fairly beneficial to both business and the state. And with modern mechanisms, we can save tens of thousands of jobs for law enforcement officers who already have enough to do," Morokhovskyy said.

In his opinion, today it is possible to control the payment of taxes, for example, through the use of current accounts.

"As a banker, I can say that it is not a problem at all to have an account that is controlled wisely. And in order to avoid the problems that once arose in Argentina, when you transfer your own money from an account and have to pay tax, the settlement between accounts is not included in this formula under the EDRPOU (National State Registry of Ukrainian Enterprises and Organisation) code. In the end, we see the account turnover, the tax and how much the organisation has to pay. We don't need any tax office - everything is visible at once and easy to control," says the businessman.

According to him, this idea was presented in a slightly different format at the meeting between the President and businessmen. Back then, it was about a single inspection body.

"If everything is checked automatically, businesses are not itching to do something stupid, and there is nothing to check, everything is given by a computer that cannot be deceived. Such non-trivial steps are what we have to foresee for the future of our business," says Morokhovskyy. 

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