IT outsourcing company Ciklum comes out in support of new Ukrainian military tax

Staff at Ciklum, one of the largest IT-companies in Ukraine, have been suggested to transfer 1.5% of their salary to the needs of the military operations in Eastern Ukraine against pro-Russian insurgents. The proposal was made by the founder and director of Ciklum, Torben Majgaard, who sent an open letter to his employees regarding the issue, reports AIN.UA.

Ciklum’s announcement comes on the back of a change to the country’s Tax Code earlier this month made by the Ukrainian parliament (Rada), whereupon the wages of working citizens will be subject to a military fee of 1.5% until January 1, 2015. The funds will be used to finance the armed forces. However, according to Torben, most developers working at Ciklum, and within the IT industry as a whole, will not be impacted by the new tax legislation.

According to the managing partner of SBT Systems Ukraine and qualified lawyer Dmitry Ovcharenko, the newly implemented taxation scheme only covers fully fledged staff members. This means that freelancers and entrepreneurs in the IT industry do not have to pay the levy. The tax measure is expected to collect around 300 million hryvnia, though Ovcharenko believes the tax could be extended beyond 2014 if more resources are needed by the military.

Torben believes that more IT companies will follow suit with similar military-supporting proposals to their own employees. “I know perfectly well that many already do contribute in various ways. And be that as it may, I think this is something that we must respond to. The IT sector as a whole is better off than the people who will have to pay this tax,” Torben wrote in a newsletter to his employees.

The initiative taken by the management of Ciklum is not mandatory, and anyone not wanting to participate in the payment scheme can refuse. Ciklum is actively cooperating with the new government in the development of the local IT industry. The company supported the establishment of BrainBasket, a foundation aimed at improving IT education in the country.

This past spring, Majgaard wrote an open letter to Minister of Economic Development and Trade Pavlo Sheremeta, calling the authorities to “move Ukraine to a knowledge-based economy.”

The company is also sponsoring Ukraine Digital News as a contribution to developing the country’s ties with the global high tech market.

According to a rating of the largest IT companies in the sphere of programming solutions, as published by online community DOU.UA, Ciklum was ranked as the fourth largest company in Ukraine in August 2014.

Topics: IT services, Labor & HR issues, Legal, News, Taxes
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