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Ihor Liski on tax hike: "Business is ready to pay, but wants interaction from the state, equal rules and systemic changes"

The main function of the state today is to mobilise the country and collect the necessary taxes to cover the budget deficit. However, it will be much easier to do this if we build the right communication with both society and business. Business is ready to pay, but it wants cooperation from the state, equal rules for all and, finally, systemic changes in tax policy, said Ihor Liski, Chairman of the Supervisory Board of EFI Group. During a discussion panel on tax hike to support the army as part of the joint project of LB.ua and EFI Group New Country, he outlined his attitude as a representative of big business to tax increases and the changes required by the business environment. 

Ihor Liski, Chairman of the Supervisory Board of the investment company EFI Group.
Photo: Maks Trebukhov
Ihor Liski, Chairman of the Supervisory Board of the investment company EFI Group.

"Personally, I have always been a libertarian and a supporter of tax cuts and other administration, but during the war, I agree with the minister [Serhiy Marchenko, Minister of Finance], the discussion is in a slightly different vein. And our society is somewhat infantile about it. Every time I say that we, the taxpayers, pay the salaries of our military. If we don't provide them, we will pay another state," said Ihor Liski.

He agreed that there are questions about the distribution of taxes, but today the main task of the state is to fill the budget to provide for the military and at least the part of weapons production that exists, "because without this we will definitely lose the war.”

However, there is a lack of discussion on how to do this properly, while society and business have a certain distrust of the state, the businessman said. At the same time, he listed possible options for filling the budget and the questions that arise.

  • Military tax

"What I like about the military tax is that it is clear: it is for the war, for the army. When the war is over, it will go away," said Ihor Liski, but suggested making as few exceptions as possible. 

"If we introduce a military tax, it should apply to individual entrepreneurs, IT specialists, and everyone. This will reduce the ways to circumvent and shadow the economy," the businessman believes. 

  • Individual entrepreneurs

This option is closely related to the previous one. On the one hand, Liski noted, it is a sacred cow for Ukraine. On the other hand, it is a legal way to avoid paying full taxes.

"If the military tax rises to 5%, the CFO has an absolutely legal alternative to fire everyone and continue to work with employees who would become individual entrepreneurs. He set up a consulting business and now an accountant, a marketer, and a financier are advising him. Is there really no understanding during the war that we are all losing from this?" the entrepreneur said.

Photo: Maks Trebukhov

  • VAT increase

"I agree that it is easier to raise VAT a little bit [than the military tax]. But how will it be administered? Where is the head of the tax office? We don't have one. And there is distrust," the businessman said.

  • Customs

"This is a story that hurts me personally. We are now going to twist all the businesses, think about how to survive, and what is the customs doing at this time?" said Liski.

"Yes, we will have more expensive iPhones. Maybe some clothes will be more expensive, etc. But this will stimulate Ukrainian production. What's wrong with that? Can't we finally administer this history during the war? This is super important," believes the EFI Group CEO.

  • Tax administration

You can urge people not to buy grey iPhones or pay with two receipts in a restaurant as much as you want, but the state should administer taxes and not pass it on to society, the businessman believes.

"There is very little active society - about 10% in any country. You can rely on them, you can consult them, they can have a leadership position. But we need a systemic solution to improve administration," said Liski.

The lack of it kills competition and makes it impossible to do business honestly.

"If some businessman next door doesn't pay taxes, cheats, or every employee is an individual entrepreneur, how can I compete with him? I just have to close down. Because the economy works in such a way that I can't pay in full if someone else doesn't. Or someone delivers imported equipment, whatever, cheaper, without paying VAT. That's it, he wins. Two or three months later, and I have to close. This is how the economy works," said the businessman. 

Ihor Liski, Chairman of the Supervisory Board of the EFI Group investment company
Photo: Maks Trebukhov
Ihor Liski, Chairman of the Supervisory Board of the EFI Group investment company

  • Economic reservation

"I am also a big supporter of bringing it out of the shadows. If we have people who are supposed to work for the country and pay taxes, we should give them this opportunity. At least with a six-month booking. When it ends, you have a legal base, a company. Maybe it will happen that everyone will go to the front, who knows. But at least until then, we will have a reasonable, manageable situation in this area," the businessman said.

He added that today the economic reservation is being communicated extremely incorrectly - "it's not about people being different, not going to serve and defend the country, officially paying off."

"It's just a temporary approval, an understandable, predictable situation that a person can work within the law," the businessman said.

  • Privatisation

The chairman of the supervisory board of EFI Group urged government agencies not to be afraid to privatise property during the war, hiding behind the fact that no one needs privatisation now.

"The right moment may not come. We have been waiting for it for how long? The crisis of 2009, then the war of 2014," he added.

"I have a lot of suggestions. But the quality of governance must improve. Tax and customs are the key stories. No matter what we want, no matter how we think, we cannot do anything without them. Without good management of these two bodies, finances will always limp along," the businessman concluded. 

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