Ukraine is preparing to raise taxes in connection with the escalation of the war. The head of the committee on finance and tax policy, Danylo Hetmantsev, defined this step as a necessary, but unpopular decision, in connection with the challenges facing the Ukrainian economy.
Currently, about 60% of government spending goes to defense, which is about 40% of the country's GDP. This puts serious pressure on the budget. Hetmantsev commented on the possible increase in VAT, which will automatically lead to an increase in prices, as well as the 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," said the People's Deputy.
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 military personnel. Hetmantsev emphasized that there are no other options available, except for raising taxes.
"Without changing the main tax laws, we cannot collect the 5 billion dollars we need," said the deputy.
He also noted that the main sources of financing are personal income tax, VAT, military levy and excise taxes. At the same time, noting that the income tax is likely to remain unchanged due to difficulties with its administration.
