Backlash Against the Law Taxing Income from Online Marketplaces
Volodymyr Poperezhnyuk, co-owner of Nova Poshta, has sharply criticized the recently adopted legislation that taxes income earned through digital platforms—a measure widely referred to as the 'OLX tax.' Ukraine's parliament, the Verkhovna Rada, passed the bill (No. 15111-d) in its second and final reading. It sets an annual tax-free threshold of €2,000 for goods sold via such platforms. Importantly, this threshold does not cap the number of transactions individuals can carry out.
The law applies to both Ukrainian and foreign companies offering digital services within Ukraine. These platforms include:
- ride-hailing services
- delivery services
- short-term rental platforms
- online marketplaces
An estimated 400,000 Ukrainians—mostly drivers and couriers—earn income through these services.
'The predictable outcome is that people’s earnings will shrink while prices go up. Why harm the economy?' Volodymyr Poperezhnyuk
Passing this law marks a significant step in regulating e-commerce in Ukraine. However, criticism from business leaders highlights potential risks for small entrepreneurs and individuals who rely on these platforms for side income. Lower earnings and rising prices could shift consumer behavior and reduce transaction volumes, ultimately dampening overall economic activity in the country.
The implications of the newly introduced 'OLX tax' extend beyond just income thresholds. For a deeper understanding of how this legislation will impact various stakeholders, including small business owners and gig economy workers, you can explore the details in our article on who will be affected by this tax.