Many entrepreneurs expected September 1, 2015 with the same awe as the first-graders. And if the latter began the first academic year at school, the entrepreneurs began a new “tax” period: on that day the updated wording of the Tax Code of Ukraine became effective, which, according to its developers, was to give a start to a new era of relations between the entrepreneurs and the state, and logically, the entrepreneurs would start a new round of development and prosperity.

By tradition, Arseniy Yatsenyuk, the Prime-Minister of Ukraine, decided to explain the essence of innovation on TV in his address “10 Minutes with the Prime Minister”. From his speech the entrepreneurs learned that the second stage of the tax reform, which will last until 2018, began in Ukraine. Meanwhile, during the transition period the rate of single social contribution to the payroll fund will be 20%. The size of the individual income tax will be the same. The Government does not intend to collect taxes from the minimum wage, and after 2018 only one tax of 20% will be withheld from wage.

In the new wording of the Tax Code, they decided to fix a single rate for 4 key taxes, namely: value added tax, single social contribution, personal income tax, corporate income tax of 20%. At the same time, “investment” tax credit is introduced, but unfortunately, its specific conditions have not been determined.

The positive aspect is preservation of the simplified tax system, which is the key to development of small and medium-sized businesses. At the same time officials do not hide the fact that the “simplified taxation” can be selective to nullify the possibility of its using by large business to minimize taxes.

On the positive side it is also worth noting the introduction of a single standard for determining the customs value of goods. The undoubted advantage is dissolution of the tax police and reduction of the number of employees of the State Fiscal Service. They plan to create the State Service of Financial Investigations with a “clean slate”.

The remaining statements of Arseniy Yatsenyuk about the “tax havens” in Ukraine were not specific. It is very difficult to analyze in detail the future plans of the Cabinet of Ministers, because the words are not backed by draft laws submitted to the Verkhovna Rada.

It is worth noting that simplification of the tax system and tax rates is an absolute progress, but, as always, “the devil is in the details” and practical implementation of the declared changes will be decisive.

Currently, it is early to speak about merits and risks of the reform. The fact is that very often the specific follow-up actions and decisions of the Cabinet of Ministers in the field of taxation do not match the public statements.

It is no secret that the real tax burden on businesses has increased in the past a year and a half. Perhaps, by adopting a new wording of the tax code, the government is trying to win back the situation in terms of return of an adequate tax burden.

At the same time, reorganization announced by management of the Cabinet of Ministers will not lead to a complete reloading of fiscal services. Therefore, entrepreneurs should not expect a change in the ideology of work of the taxmen. The allegations that the fiscal service will become a helping hand for entrepreneurs have not been confirmed, because it is impossible to build something new with the old personnel.

The existing moratorium on inspections of small business entities is a big plus. However, entrepreneurs understand that despite the moratorium, tax audit can still come to them. Now the taxmen may “pay a visit” with the blessing of the highest management. Further, the issues on quality of inspections and justification of additional charges have not been resolved.

The entrepreneurs understand that arbitrary behavior of taxmen has decreased slightly, but has not been liquidated. Such conditions do not encourage business to work transparently.

It should also be borne in mind that accountants of companies are already sick and tired from the tax reform. Laws and clarifications change so often that many companies do not see the feasibility of tax planning to carry out their activities. Unjustified complexity of tax regulation and its instability are still the biggest problem for entrepreneurs.

Ukraine obviously needs to reform tax laws and simplify bureaucratic procedures. However, the Cabinet of Ministers must remember that management always provides for feedback. It seems that when writing the draft laws, the officials still do not want to hear comments and suggestions of entrepreneurs. Or approve progressive laws, but continue to collect taxes in the old way.

It would be also desirable to improve the officials as the society needs it very much.