A majority of Ukrainians don’t know how their taxes are being spent and very few actually realize how much the average person pays in taxes every year, according to a new study.
Think tank Center for Social and Economic Research (CASE) and the Kyiv International Institute of Sociology have surveyed 2,038 people in 111 towns and cities, asking Ukrainians how much they think they pay in taxes, their opinion of taxes, what they think most tax revenues are being spent on and what they think is a fair rate.
An average officially employed worker gives the state about half of their income, which includes income taxes, social contributions, VAT on purchases and excise and duties – and only 6% of polled Ukrainians knew that.
Over 15% of respondents, including retirees and the unemployed, believe they pay no taxes at all, yet they still contribute 20% VAT, on top of excise and duty on most purchases, according to CASE.
Many respondents also see taxation in a negative light. Almost 30% said that taxes are a mandatory fee that people pay to the state to be allowed to use the rest of their income. About 20% called taxes a robbery. Only 30% of respondents believe that taxes are a contribution to programs that society needs and 13% believe taxes are fees for public services.
Many Ukrainians were also unable to answer how their taxes are used – 36.5% could not respond to the question at all.
Of those who answered, 18% incorrectly believed that the lion’s share of tax proceeds pay for the army and 16.4% believed that the majority goes to pay for Ukraine’s debts.
The Center for Social and Economic Research asked Ukrainians what they think of taxes and how many taxes they believe they owe to the government.
In reality, a person’s total combined taxes largely go to pensions and education. For a person with a net salary of Hr 120,000 ($4,360) a year, more than a 40% of total taxes go towards pensions ($1,460), about 11% go towards education ($360) and 7% towards the government’s support of the economy ($260), according to CASE’s budget calculator.
Just over half of the respondents believe that a 10% tax rate is the most fair, with just over a fifth being unable to answer that question; 17.4% of respondents believe that a 25% tax rate is fair.
In a November interview with the publication Ukrainska Pravda, Halyna Vasylchenko, a lawmaker with a 20-member Voice faction, said that 60% of personal taxes go towards the budgets of cities with regional significance, with just 15% going to the regional budget and 25% going to the national budget.
This means that people in smaller population centers are paying for the development of their larger neighbors even as their hometowns languish in neglect.
