All attempts by the authorities to pull the economy out of the shadows in this approach will never give a result

Все попытки властей вывести экономику из тени при таком подходе никогда не дадут результата

The original page Daniel Monina in Facebook

There are two fundamentally different ways to keep a business legally and to minimize the shadow economy.

One path is the installation path of administrative bans and increasing punitive functions for violation of the prohibitions. That’s the way our state for 25 years and obviously to no avail. Because punitive measures lead to the corruption and bribery of persons exercising the regulatory activities that are actually for business means the increase in the tax burden, and to state the absence of additional budget revenues.

The second way is fundamentally different. It means taking a mass of prohibitions, the creation of economic incentives and the provision of freedom of doing business, where everything not explicitly forbidden is allowed.

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You can create hundreds of black, to create tax appraisers and other inspectors at customs, and you can just make the open border with free movement of goods and services when all of the products included in the Ukraine – legal.

Because if you actually look at smuggling, even if the product was illegally imported to Ukraine and sold in the legal economy, the state will receive the same amount of taxes. Just tax will be charged not at the time of crossing the border, and during his sale to the consumer.

If the product is sold in the underground economy – that means that he sold for cash.

Related news: In the Ministry believe that the fight with the shadow employment needs of local authorities

The state can organize a demonstration and mimic the fight against conversion centers, and making high taxation of labour, and to take prepaid taxes for the work, and can do otherwise – to minimize the taxes on labour and to levy a tax for the withdrawal of money in cash. It’s a different approach, but it gives economic incentives to agents to work in the legal field and carries the taxation of labour in two phases – one during the enumeration on the card, the other during the conclusion in the cache.

The state can deal with offshore companies, to develop and implement a BEPS rules, test the financial result of each economic agent, looking for violations, and may impose a direct tax on the withdrawal of funds abroad and to abolish the profit tax altogether.

The second path is laid in the program of reforms of the “Free Economy”.

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Daniil Monin

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