Shortcomings of the New Law Abolishing the 2 Percent Tax Rate for Simplified Taxpayers

Since last Friday, the internet and business news outlets have been flooded with reports that, effective August 1, 2023, the 2% tax rate for third-group simplified tax payers will be abolished. 
This is due to the adoption of the Law of Ukraine, based on Bill No. 8401 dated January 31, 2023, “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Specifics of Taxation During the Period of Martial Law.”
It is not advisable to comment on the adopted law, as its text has not yet been published.
However, it proved quite interesting to review the process leading up to its adoption. In particular, on the official website of the Ukrainian Parliament, in the details page for the aforementioned bill (at https://itd.rada.gov.ua/billInfo/Bills/Card/41268), among a large number of documents, the following are available:
- Comments on the Draft Law (second reading) from the Main Legal Department of the Verkhovna Rada Secretariat (https://itd.rada.gov.ua/billInfo/Bills/pubFile/1858469)
- Comparative table (Second Reading) (https://itd.rada.gov.ua/billInfo/Bills/pubFile/1858439)
In the first document mentioned, the Legal Department of the Verkhovna Rada Secretariat lists a significant number of shortcomings in the proposed bill, notes numerous violations of the Constitution of Ukraine and the principle of stability of the tax system, and indicates that the bill requires further refinement.
The second document presents the results of the work by the Verkhovna Rada Committee on Finance, Tax, and Customs Policy regarding the review of amendments to the bill proposed by members of parliament and its preparation for the second reading. As shown in the Comparative Table, 1,910 amendments were proposed and reviewed. Of these, only 11 were “accepted,” while all others were “rejected.” Among those “accepted” are 10 amendments proposed by People’s Deputy O.D. Getmantsev (chairman of the Committee on Finance, Tax, and Customs Policy).
It is evident from the above that, despite the glaring violations—and even the fact that the Verkhovna Rada’s Legal Department has pointed them out—the relevant committees adopt only those decisions that suit them, and businesses will have to defend adherence to the fundamental principles of the rule of law through the courts. Although there is little hope placed in the judicial branch.