MP Yaroslav Zheleznyak shared important details of the revised draft law on tax increases, which will soon be submitted to the relevant committee and, likely, to parliament. These changes should significantly affect the country's financial policy, especially in times of war and economic instability.
What remains of the old text?
The updated bill retains some of the main provisions of the old version, which were widely discussed earlier:
- Increase in military levy rate : From 1.5% to 5%. This measure is aimed at increasing budget revenues to support defense spending.
- Establishment of military levy for individual entrepreneurs : A military levy of 10% of the minimum wage will be introduced for entrepreneurs of the first and second groups.
- Military tax rate for group III of the single tax : 1%.
- Monthly advance payments for gas stations : With the amended version of the document.
What's new in the draft law?
The new provisions of the draft law include:
- Profit tax rate for banks : Setting the rate at 50% for 2024. This is a significant increase, which aims to mobilize additional funds for the state budget.
- Increase in the income tax rate for financial companies : Up to 25%. This is also part of the government's efforts to fill the budget.
- Monthly personal income tax reporting : An innovation aimed at increasing transparency in matters of personal income taxation.
Budget deficit financing and the IMF response
The Ukrainian government, for the first time since the start of the full-scale invasion, has proposed such significant changes in tax policy to compensate for the state budget deficit caused by defense and reconstruction spending. Increasing the military levy and introducing a new income tax for banks and financial companies are part of this strategy.
However, the International Monetary Fund (IMF) has expressed concern that the tax hike could affect Western countries' willingness to continue providing financial assistance to Ukraine, an issue that could become important in future negotiations with international partners.
Prospects for the adoption of the bill
Yaroslav Zheleznyak noted that the draft law in its current version, proposed by the Cabinet of Ministers, will not be adopted. However, this does not mean that the ideas for increasing taxes have been rejected. The draft law will be discussed and finalized at the committee and parliamentary levels, and changes are possible in its final version.
