Who benefits from the tax on capital withdrawal

Alexander Paraschiy, Head of Research at Concorde Capital, about the tax on capital withdrawals

Strictly by the numbers, replacing the tax on profits with a tax on capital withdrawals would leave profitable companies more money that they can invest in further development. But it’s still an open question whether they will invest or not. Currently, our companies have accumulated nearly UAH 400 bln on bank accounts that they aren’t investing for some reason.

Therefore, I would not await a miracle from such a new tax, and the issue here is not about taxes. Which Ukrainian businesses are not benefitted by such a new tax? It’s those companies that accumulated large losses in the recent difficult years. After all, their accumulated losses allow them to avoid paying a profit tax for another year. But in the case of a tax on capital withdrawal, it will have to be paid regardless.

Comment for DELO.ua regarding the tax on capital withdrawals from Alexander Paraschiy, Head of Research at Concorde Capital investment company (Igor Mazepa  is a CEO of Concorde Capital)

This post is also available in: Ru