Employees Also Paid 1 Tax Computation
The Ukrainian tax system in the late 1990s had several components. The per- sonal income tax (calculated and paid on a monthly basis) had these brackets:
Zero if income was below one NTM 10% for income from 1 NTM 1 1 KBV to 5 NTM 20% for income from 5 NTM 1 1 KBV to 10 NTM, plus the tax on 5 NTM 30% for income from 10 NTM 1 1 KBV to 15 NTM, plus the tax on 10 NTM 40% for income from 15 NTM 1 1 KBV to 25 NTM, plus the tax on 15 NTM 50% for income above 25 NTM, plus the tax on 25 NTM KBV, karbovantsi; NTM, nontaxed minimum. The NTM was 1,400,000
KBV (one U.S. dollar was worth about 180,000 Ukrainian KBV). In September 1995, the average monthly salary was 9 million KBV.
Use of the NTM provides an easy way of adjusting the entire tax structure for the impact of inflation. Employers paid payroll taxes at these rates: 37 percent to the social insur- ance fund, 12 percent to the Chernobyl fund, and 2 percent to the employment fund. Employees also paid 1 percent to the employment fund.