The Ministry of Finance of Ukraine is developing a bill to increase the military levy and the value-added tax (VAT) rate. In addition, it is planned to make military levy mandatory for individual entrepreneurs (IEOs).
Danylo Hetmantsev, Chairman of the Verkhovna Rada of Ukraine Committee on Finance, Tax and Customs Policy, provided this information, noting that the measures are aimed at providing additional funds to finance the army due to its growing needs.
Planned changes include:
- Increasing the military levy from 1.5% to 5%;
- Introduction of a 5% tax rate for individual entrepreneurs of the third group;
- A likely increase in the VAT rate by 2-3% (currently 20%).
According to Hetmantsev, the necessary funds will be directed to additional mobilization and financing of the army. He noted that about UAH 300 billion is needed, and another UAH 400 billion is needed for the purchase and repair of military equipment.
According to Forbes, increasing the military tax rate from 1.5% to 5% for employees could bring UAH 90-100 billion to the budget per year. Raising the VAT rate by one percentage point could add approximately UAH 40 billion in additional annual revenues. If the VAT rate were to increase by 2 or 3 percentage points, budget revenues would increase by UAH 70-80 billion and UAH 100-120 billion, respectively.
