Ukraine may introduce additional pension tax

At the request of the IMF in Ukraine, you may receive an additional tax on social insurance contributions.

The introduction in Ukraine of additional pension tax in the framework of the pension reform envisaged in the draft Memorandum with the International monetary Fund (IMF).

The document States that the additional tax on social insurance contributions will be introduced to be paid by employers and will accumulate on the personalized accounts.

The tax will be used as an interim source of financing the pension reform. As one of the main characteristics of the pension reform the Memorandum noted the need to provide new choices for retirement with a broader range of retirement age than at this time.

These options will provide a greater degree of choice depending on seniority, the pension payments should encourage longer employment and later retirement. In General, pension reform should lead to savings of at least 3% of GDP from 2016 by extending the effective years of work experience of the population.

According to the draft Memorandum, the Parliament needs to pass pension reform before the end of April, and to enter into force it needs from 2018.

It will be recalled that earlier, Finance Minister Alexander danyluk said that the Memorandum of cooperation with the IMF does not foresee raising the retirement age.

Later, the IMF said that Ukraine is in dire need of pension reform and raising the retirement age is one of its mechanisms.

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