European Solidarity explained how it was able to remove the VAT issue for sole proprietors and why this is a victory for the Ukrainian economy.
The introduction of VAT for sole proprietors was successfully cancelled thanks to the active position of civil society, experts, and opposition factions in parliament.
This was stated at a briefing by People’s Deputies from the European Solidarity faction, Artur Gerasimov and Nina Yuzhanina.
They reported that the faction had met specifically with IMF representatives and explained that such a decision was unacceptable during a war.
As faction co-chair Artur Gerasimov noted, the IMF memorandum on introducing VAT for sole proprietors was signed by President Zelenskyy, Prime Minister Svyrydenko, and other officials. This demonstrated their complete lack of understanding of how the country’s economy functions, how people live today, and how entrepreneurs live today. This amounts to millions of families, if we count not only the sole proprietors themselves but also the workers they employ,” Gerasimov noted.
“At this meeting with the IMF, European Solidarity firmly stated that additional taxation of sole proprietors is a red line for us. We do not intend to vote for it and will convince the entire parliament not to do so. We came to this meeting with figures, evidence, and constructive proposals,” Gerasimov said.
“Thanks to the work of our faction, Nina Petrovna Yuzhanina, and Petro Oleksiyovych, over 100 billion hryvnias of corrupt and inefficiently used money were found in the state budget. And we showed the International Monetary Fund that if they need to compensate for what they want to take from sole proprietors, here you go,” Gerasimov explained.
“Why doesn’t the government want this? They’d rather give the money to Mindich than take it from ordinary people, pensioners, entrepreneurs, and the military, who haven’t received pay raises in years. But Mindich can’t be touched,” the MP protested.
Member of Parliament Nina Yuzhanina noted that the issue isn’t just about VAT for sole proprietors; it’s about the government’s inconsistent actions and the damage they’re inflicting on the national economy with their ill-considered decisions. “After all, while the issue was being discussed, some people decided to cease operations. Some relocated to another country. Such actions are simply prohibited in a country that needs additional budget revenue. I would like the government to hear this and understand the full extent of the damage they’ve caused with their statements and their commitments,” Yuzhanina emphasized.
She recalled that the authorities planned to impose VAT on sole proprietors with an annual income of over UAH 1 million: “This was supposed to apply to 628,000 sole proprietors. Here are the figures for 2025. One million 600,000 entrepreneurs operate under the simplified tax system. In 2025, they paid UAH 126 billion in taxes. UAH 56.5 billion is the sole tax paid to local budgets. UAH 18 billion is the military tax paid to the state budget. UAH 30 billion is the unified social contribution to the Pension Fund. Other taxes total UAH 21.3 billion. They have employees, and there are 980,000 of them. On average, there are four employees per entrepreneur. Sole proprietors paid UAH 26.4 billion to the state budget and local budgets for their employees,” Nina Yuzhanina said.
According to the deputy, despite public outrage, the government continued to pursue its own course, raising the threshold for sole proprietors to 4 million hryvnias. “Why was this initiative harmful? Because entrepreneurs should hire accountants. VAT is a complex tax, and accounting for it requires specialized knowledge,” the deputy notes.
“Therefore, when we heard Sviridenko’s statement that, while working with the IMF, they managed to agree on the abolition of mandatory VAT for sole proprietors, we would like to point out that it wasn’t officials who cancelled such a harmful initiative. It was entrepreneurs, active members of parliament, including the EU faction, which thoroughly argued at every possible meeting why sole proprietors can’t be VAT payers. I congratulate us all and believe that such significant tax changes during a full-scale war should be forgotten. Don’t even give them a reason to negotiate later, don’t make any commitments, and focus solely on the opportunities of small and micro-businesses in Ukraine so that our economy can survive and we can move toward ending the war,” Yuzhanina emphasized.
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