KATA: The planned changes would take the form of covert employment

The itemized tax on small tax enterprises (KATA) has enjoyed unbroken popularity since its introduction in 2013. Year after year, more and more people choose it due to favorable financial conditions and simple administration. However, in addition to the originally targeted group of taxpayers, micro-enterprises, many see it as an alternative to employment. It was therefore expected that the Ministry of Finance would tighten the rules over time.

At the time of the introduction of KATA, only 3 percent of those who chose the tax type were previously employed, by the end of 2019, this proportion was already 40 percent, according to the Ministry of Finance. Thus, there has been a significant increase in the number of people who have become KATA users who were previously typically employed.