KIEV, UKRAINE (BNO NEWS) – Ukrainian Prime Minister Mykola Azarov on Friday said that Ukraine will have the lowest taxes in Europe after the new tax code is adopted.

The Ukrainian government is expected to submit an amended tax code to the Supreme Rada, the national parliament, by Sunday, according to Ria Novosti.

The new code establishes zero taxation for small businesses for a five-year period and the same zero rate will apply to the hospitality sector and light industry for ten years.

“We will set low taxes, perhaps the lowest in Europe. The amended code’s main principle is the liberalization of tax legislation,” Azarov said.

Owners of apartments and houses with a floor area of over 100 square meters on town and 200 meters in rural areas will pay a real estate tax at a rate of $1.25 per square meter.

Only 5 percent of Ukrainian population would be subject to the real estate tax. Household bank deposits exceeding $25,000 will be taxed at 5 percent. The Cabinet earlier sought to tax all deposits at 5 percent.

Income tax will be set at 15 percent for incomes under $1,111 a month and at 17% for incomes above $1,111. Finally, the government would move to reduce VAT from 20 percent to 17 percent by 2014.

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