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Ukraine | Tax on deposit interest

Ukraine | Tax on deposit interest

The Prime Minister of Ukraine Arseniy Yatsenyuk proposed on Wednesday 19th of March 2014 the adoption of taxes on wealth of the richest Ukrainians in order to tackle the economic crisis in the country, clarifying that the law will apply to him as well.

The Ukrainian prime minister stated that the proposed tax measures should apply on deposits more than 50,000 hryvnia (less than 4,000 euros). The measure is expected to affect approximately 10% of the population.

During the ministerial council meeting, Arseniy Yatsenyuk cited his own tax return as an example showing that interest on his deposits amounted to 714,000 hryvnia (47,000 euros).

Mr Yatsenyuk specifically stated: "Rich people ought to share their wealth with the country. It is time for justice. It is time to help the country".

The online financial newspaper Ekonomitcna Pravda criticized this initiative with the fear of a massive withdrawal of deposits especially nowadays that the bank sector is in a difficult position because of the political and economic crisis.

"We need to stabilize the economy, we will succeed in getting financial aid from the International Monetary Fund and our Western partners" said the Ukrainian Prime Minister.

The Ukrainian economy is in a terrible position with a public debt of €75 billion, which the country accumulated mostly during the last years, and a huge financial deficit.

The European Commission and the United States commended to provide financial aid to Ukraine amounting to several billion, in order to avoid the suspension of payments after the fall of the regime of President Viktor Yanukovych.

Representatives of the International Monetary Fund are negotiating a financial aid to Ukraine. Kiev estimates that at least 15 billion are needed in short-term.