Economist Calculates True Tax Burden for Businesses on OLX and Prom

Debating New Tax Proposals

According to ХВИЛЯ: In a discussion with political analyst Yuriy Romanenko, economist Danylo Monin analyzed new tax initiatives targeting digital platforms like OLX and Prom. He calculated the effective tax rate, revealing it amounts to 10% of turnover. Monin warned that these measures could severely impact small businesses. These proposals are part of a broader trend of governments seeking to tax the digital economy more effectively.

'They added a so-called 5% tax, but it also falls under the military levy. Consequently, your real tax from digital platforms is 10% of turnover. If you are a seller, you already pay the platform itself between 10% and 30% in commissions. Adding another 10% for the state makes the work simply pointless,' - Danylo Monin

Potential Consequences of the New Initiatives

The economist believes the new tax initiatives could lead to a situation where 'practically all sellers will leave digital platforms.' He predicts businesses may migrate to Telegram channels or create their own websites to minimize contact with the major platforms.

'We are talking about small businesses being displaced by large ones, because only large companies will be able to handle such a burden,' - Danylo Monin

The debate underscores the critical need for tax systems to adapt to modern business conditions, especially with increasing digitalization. Given the significant role small businesses play in the economy, changes in taxation could lead to serious socio-economic consequences. This highlights the delicate balance between generating state revenue and fostering a competitive commercial environment.

• The migration of sellers to other platforms or to their own sites could significantly reshape the market.
• This may result in reduced competition and increased monopolization in certain sectors.

As the discussion around taxation intensifies, the implications for small businesses are becoming increasingly dire. The potential shifts in the market could mirror concerns raised in a similar analysis about how tax reforms might threaten Ukraine's small business sector. For a deeper understanding of these challenges and their broader effects, see this insightful piece on the impact of tax reform on small enterprises.