Ukraine is preparing to raise taxes in response to the escalation of the war. The head of the Finance and Tax Policy Committee, Danylo Hetmantsev, described the move as a necessary but unpopular decision due to the challenges facing the Ukrainian economy.
Currently, about 60% of state spending is directed at defense, which accounts for about 40% of the country's GDP. This puts serious pressure on the budget. Hetmantsev commented on a possible increase in VAT, which would automatically lead to an increase in prices, as well as a military levy.
“This is not the best decision, but we have to choose between life and money. Obviously, we choose life. Therefore, we will probably be forced to make this decision,” the MP said.
A representative of the Servant of the People party warned that the lack of funding for the army would have fatal consequences for the economy. Therefore, it is important to find funds to meet the needs of servicemen. Hetmantsev emphasized that there are no other options available except for raising taxes.
“Without changing the basic tax laws, we cannot raise the $5 billion we need,” the deputy said.
He also noted that the main sources of financing are personal income tax, VAT, military levy, and excise taxes. At the same time, he noted that the income tax will likely remain unchanged due to the difficulties with its administration.
