“Poverty Ahead”: In Nova Poshta, warnings about VAT on parcels’ consequences

The cost of shipments and delivery times will rise.

Co-founder of Nova Poshta Volodymyr Poperešnyuk gave a negative assessment of the Verkhovna Rada’s approval of introducing VAT on parcels up to 150 euros. According to him, this decision will “affect practically everyone” in Ukraine.

Poverty Ahead

“The government managed to push through this economy-harming tax after all. I sympathize with everyone, because taxation of parcels will affect practically everyone,” he noted.

Poperešnyuk reminded that Ukraine imports the majority of goods, so, in his view, the population will become poorer. In turn, a decrease in purchasing power and a drop in demand will hit businesses.

“The cost of parcels and delivery times will rise, and Ukrainians will spend more money because there are no alternatives to the assortment of imported goods. Ukrainian retail will also suffer,” he believes.

The businessman emphasized that this decision was made amid rising costs due to strikes on warehouses.

Delivery delays and smuggling

According to him, there will be a collapse at customs due to a tens-to-hundreds fold increase in workload, and logistics will be affected.

“And not only for postal operators; this will concern all carriers, which, in turn, will impact the growth of smuggling,” added the businessman.

Ultimately, according to Poperešnyuk, poverty and economic decline will affect Ukraine’s defense capability.

“The state, by nature, always seeks to expand control, raise taxes, and pressure businesses. But every new tax will always slow economic development, welfare, and our country’s defense capability,” he forecast.

As a reminder, on the eve of the session, after two failures the Verkhovna Rada finally supported in the first reading the bill on taxing international online purchases via foreign marketplaces № 16051-1, which is a requirement of the International Monetary Fund. The bill was voted for by 273 members of parliament.