NBU urges adoption of 10% tax on retail foreign currency sale

The National Bank of Ukraine wants parliament to adopt a bill to introduce a 10% charge on individuals’ cash sale of foreign currency, an NBU official told reporters on Dec. 11. The bill stipulates that all cash sales of foreign currency for hryvnia will be taxed, with the exception of money transfers from abroad that do not exceed UAH 150,000 (USD 18,500), and foreign currency that is withdrawn from banking deposit accounts with tenure of at least 30 days on deposit. Earlier this month, a similar bill stipulating a 15% tax was submitted, then withdrawn from the parliament’s agenda.

Alexander Paraschiy: The new bill, like the previous one, has little support in the Rada, even among the representatives of ruling party. Most likely, continuous statements from NBU officials about the need to adopt this kind of taxation is directed at Ukrainian citizens, who are buying foreign currency for savings and keeping it outside the banking system. For instance, in November alone, households bought net USD 1.5 bln (by purchasing 2.3x more foreign currency than selling it), which was the key factor of the NBU reserves decline by the same USD 1.5 bln during the month. At the same time, according to NBU officials, the news flow on intentions to introduce the exchange tax has halved the population’s foreign currency purchases and doubled their sales during the last three weeks.