Pilot Project by the State Tax Service and Local Communities Increases Tourism Tax by 60%

The pilot project on the administration of the tourism tax, which the State Tax Service of Ukraine launched in April in collaboration with four local communities in the Chernivtsi and Khmelnytskyi regions, has yielded its first results. The reported amounts of the tourist tax in the participating communities increased by 60%.

The project involves the exchange of data and analytics between the State Tax Service and local government bodies, which makes it possible to more accurately assess revenue potential and identify opportunities to increase local budget revenues.

The Staroushitska community showed the most significant growth, with the tourism tax increasing 11-fold compared to last year — to 40,000 UAH. In the Kamianets-Podilskyi community, the figure increased by 84% in the second quarter, or by 203,000 UAH, and in the Khotyn community, by 15%, or by 4,900 UAH. The Kytayhorod community reported tourism tax revenue for the first time in the second quarter — 45,400 UAH.

According to Lesya Karnaukh, acting head of the State Tax Service, the positive experience of the pilot communities is already spreading to other regions: 19 communities reported tourism tax revenue for the first time. Overall, across Ukraine, the declared amounts of the tax increased by 25.2%, or 17.7 million UAH, in the first quarter, and by 24.9%, or 19.7 million UAH, in the second quarter.

The State Tax Service notes that cooperation with communities should help bring the tourism sector out of the shadows and increase local budget revenues. According to the tax authority’s estimates, about 20–30% of the tourism market still operates in the shadows.

Source: State Tax Service of Ukraine

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