The Economist wrote that patriotic Ukrainians are eager to pay taxes to support the country.

(File photo of this newspaper)

[Compilation of Wei Guojin/Taipei Report] The tax filing season in Taiwan is about to start, but how is the tax payment situation in war-torn Ukraine?

The Economist pointed out that after the Russian invasion last February, Ukrainian Finance Minister Serhiy Marchenko reasonably estimated that government revenues would plummet as economic activity shrank.

However, despite a 29% drop in Ukraine's GDP in 2022, its annual income is only 14% lower than a year ago.

The article titled "Patriotic Ukrainians Are in a Hurry to Pay Taxes" stated that war-induced declines in tax revenues for imports and tourism, as well as blackouts caused by Russian attacks on power plants and power grids, interfered with the automatic operation of taxable transactions. The "unique results" of .

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One explanation is that corporations and taxpayers eager to support national defense pay higher taxes than required.

Statistics from the Ukrainian Ministry of Finance last year showed that related donations increased from US$880 million in March last year to more than US$28 billion in May.

That's a lot of money.

According to Maksym Dudnyk, a tax partner at PwC, excluding donations, Ukraine’s total annual revenue reached $37 billion last year.

He said the general thinking among Ukrainians is: "If Ukraine wins, you have your own country, but if Russia wins, the brutal dictator will take your money anyway, so why not help now"?

Many Ukrainians also pay their taxes early, the article said.

Constantin Solyar of the Kiev law firm Asters recalls a meeting with a client shortly after the Russian invasion.

"I was almost moved to tears" when the client asked how his company paid its taxes up front, he said.

Since then, the situation of paying taxes in advance has become the norm. Dudnick said that almost all of the more than 100 clients he has served in the past year have paid taxes in advance.

Illya Sverdlov of Kinstellar, another law firm, said the move generated good publicity, with some companies playing up the story in the media.

However, there are also many people who silently join the ranks of paying taxes.

The war has caused many Ukrainians who have settled abroad for many years to start paying taxes to the state, and the number of people who try their best to evade taxes has obviously decreased.

Perhaps most surprising, the article says, is that the Ukrainian State Tax Service continues to receive tax payments through its website from territories occupied by Russia (although not Crimea, which is firmly under Russian control).

Ukrainian Finance Minister Machenko said that people in these areas are under enormous pressure to pay taxes to Russia, and many local companies must also bribe Russian commanders and militias to obtain business licenses.

Still, 2.3 million people in the region paid taxes to Ukraine worth $9.5 billion last year.

They dared to pay taxes to the state at the risk of retaliation by the murderous and brutal Russian "punishers".