The recent changes in Ukraine’s tax policy toward Internet service providers have caused considerable concern among Internet users. The transition of ISPs from the simplified taxation system to the general taxation system will significantly affect the cost of Internet services, especially in small towns. On the other hand, it could lead to a monopolization of the market by large operators such as Ukrtelecom or Kyivstar.
Key factors influencing price increases
- Increased tax burden: The introduction of VAT and other tax obligations will significantly increase the costs of providers.
- Costs of accounting services: The need to hire accountants for accounting will lead to additional financial costs.
- Reduced investment in network development: Due to the increased tax burden, providers may reduce investments in equipment modernization and network expansion.
- The risk of small providers disappearing: For small companies, additional costs can become critical, which can lead to their closure.
Implications for users
- Increase in the cost of Internet services: Internet prices can increase by 10-15% or more, especially in small towns.
- Deterioration of service quality: Reduced investment in network development can lead to slower internet speeds and more outages.
- Reduced competition: The disappearance of small providers may lead to a monopolization of the market by large companies, which will negatively affect the quality of services and their cost.
Ukrtelecom will not increase prices
At the same time, Ukrtelecom has informed HiTech Expert that this year the operator’s Internet prices will remain unchanged. The increase in Internet tariffs announced by many providers due to the transition to a new general taxation system will not affect Ukrtelecom’s customers.
Ukrtelecom is a large system operator whose tariffs have always been in line with the market. Taxes account for more than 30% of the tariff for end users. At the same time, Ukrtelecom pays them to the budgets of all levels in a timely manner and in full. In particular, the company paid over UAH 1.35 billion in taxes in 2023 and over UAH 660 million in the first six months of 2024.
“Moreover, we have developed a new tariff called ‘Price is not news’, thanks to which our subscribers will know their price for two years! The price will not change due to inflation, the cost of maintaining energy independence of the networks, etc. This will allow new subscribers to plan their family budget for Internet expenses,” said Igor Yaremchuk, Ukrtelecom‘s commercial director.
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