The Ukrainian Parliament on Thursday passed a bill amending the country's tax code system, thus fulfilling one of the key requirements set by the International Monetary Fund (IMF) to continue allocation of financial aid to the eastern European country.
The legislation was adopted with 251 votes in favor, a voting that has met with the required minimum benchmark of 226 votes, according to a statement posted at the parliament's website.
Under the new law, certain taxes will be raised, while some others will be lowered or replaced.
In particular, Kiev will increase the license duties on alcohol, tobacco and fuels and raise property and ecological taxes to increase budget revenues.
Some agricultural enterprises, which used to receive compensation for the value-added taxes from the state budget, will no longer enjoy preferential treatment in taxation with the new law.
In the same time, the payroll tax will be reduced from the current 41 percent to 20 percent, which is aimed at helping withdraw small and medium-sized enterprises out of the shadow economy.
The tax code amendments also stipulate that individuals will be levied a flat rate of 18 percent for income tax, instead of the existing two-tier system of 15 percent and 20 percent.
The taxation reform, which is expected to allow Ukraine to meet a deficit target of 3.7 percent of gross domestic product in its 2016 budget, has been required by the IMF to release a new tranche of credit for Kiev under the 17.5-billion-U.S.-dollar bailout program.
Last week, the global lender warned that the Ukrainian parliament's failure to adopt the proposed tax code and the budget for 2016 could disrupt the program.
The voting on the budget is set to take place Friday.