Ukraine's economy transition to cashless settlements unacceptable without tax reform, capital amnesty - Zelensky's Office
MOSCOW. July 3 (Interfax) - Ukraine's economy's transition to cashless settlements will be accompanied by the tax reform, capital amnesty and infrastructural changes, deputy head of Ukrainian President Vladimir Zelensky's Office Rostislav Shurma said.
"This will be a step-by-step process involving a dozen reforms in other areas. Without a comprehensive tax reform, including in the version that we began to discuss, with a substantial reduction in tax rates, cashless is impossible," he was quoted by the Ukrainian media as saying at a press conference in Kiev last Friday.
If everything becomes cashless with the current tax burden, then either people's incomes will drop substantially or the economy could become non-competitive, he said.
The second prerequisite for going cashless is a complete and total amnesty of capital, Shurma said. "If we move to cashless, then everyone who has accumulated the capital should be given the opportunity to legalize it," the public official said with confidence.
In addition, it is necessary to solve another problem that arises during the transition to cashless transactions; this is to provide the conditions for non-cash payments throughout Ukraine, for which a specific project with Ukrposhta is being elaborated, details of which Shurma has not yet disclosed, indicating that society will learn of them in the coming weeks.
"We are preparing a project with Ukrposhta, the main purpose of which will be to provide 100% coverage of the entire Ukrainian population with digital banking services and 100% coverage of all possible sale outlets with modern terminals, including those operating offline, which is critical in the absence of electricity," the deputy head of the President's Office said.
He also noted that the Postbank model is operating quite successfully in many countries, fulfilling an economic and social function. "The network of Ukrposhta exceeds many times the total network of bank branches and is able to provide 100% coverage of the population with banking products, which is critical for cashless," Shurma said.
He also drew attention to the need to educate and train people to work with digital money, which is, in his opinion, safer and more secure than cash. At the same time, Shurma emphasized that people need to be as confident in digital money as they are in cash.
Elaborating on the reasons prompting the authorities to introduce the cashless regime, the public official primarily focused on two things: low tax payments in the non-public sector and bribery.
"In fact, people don't pay taxes. Of those working in the private sector, 60-70% do not pay taxes in full. This is a fact. It is enough to look at consumer spending in the economy and the amount of wages paid to see these figures," Shurma said.
As for corruption, he noted that despite much speculation about moving illicit benefits to cashless or bitcoins, "99.9% of bribes are paid in cash."
"Going cashless does not give a 100% guarantee of eliminating corruption, but unlike cash, it always leaves a trail. Fighting corruption will be much easier," the public official said with confidence.
In response to a follow-up question from reporters, Shurma said, "There is no decision to impose a tax on cash."