Weak economy may force Ukraine to shelve plans to cut corporate tax, VAT: minister | Reuters

Weak economy may force Ukraine to shelve plans to cut corporate tax, VAT: minister | Reuters:

"Ukraine, struggling with a weak economy, is considering shelving plans to cut corporate tax and VAT next year to prevent further pressure on its deteriorating public finances, its chief tax minister said.

Under tax legislation mapped out in 2010, the former Soviet republic was set to reduce corporate income tax to 16 percent, from 19 percent, and reduce the value-added tax (VAT) rate to 17 percent, from 20 percent.

The two taxes typically account for about two thirds of Ukraine's total state budget revenue. Revenue and Duties Minister Oleksandr Klymenko said the International Monetary Fund, Kiev's main international lender, had backed putting the tax cuts on hold given the deteriorating economy.

"We are now in discussion on this issue," Klymenko told Reuters in an interview in which he outlined the government's plans to boost public revenues by plugging tax loopholes and aligning Ukraine's taxation system with European standards."

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