The Chairman of the Finance Committee of the Verkhovna Rada of Ukraine, Danylo Hetmantsev, announced that the working group, which is engaged in the development of the government's draft law on increasing taxes, has agreed to increase the military levy on citizens' incomes from 1.5% to 5%. A military levy of 1% will also be introduced for individual entrepreneurs of the third group. This decision has caused a wide resonance among economists and entrepreneurs, who express concern about its consequences for business and the country's economy as a whole.
It is worth noting that during the discussion of the draft law, an increase in the bank profit tax from 25% to 50% was excluded. This happened due to the categorical position of the Ministry of Finance and the National Bank of Ukraine, which opposed such a step. As Hetmantsev noted, the increase in the bank profit tax was not agreed upon due to risks to the stability of the banking sector, which shows significant financial results.
Financial condition of Ukrainian banks: profit growth
In the first seven months of 2024, the net profit of Ukrainian banks after tax amounted to 93.6 billion hryvnias, which exceeds the indicators of the previous year. According to the National Bank of Ukraine, bank income during this period increased by 17% and amounted to 293.7 billion hryvnias, in particular, interest income increased by 20.1% and reached 201.8 billion hryvnias. This indicates the stability and even growth of the financial sector in wartime conditions, which makes the decision not to increase the tax on bank profits understandable.
Criticism of economic policy: Mykhailo Kukhar on the risks of raising taxes
Senior economist at Ukraine Economic Outlook Mykhailo Kukhar has sharply criticized the government's plans to raise taxes in Ukraine. In his post on Facebook, Kukhar noted that Ukraine's 2023 budget was overfulfilled by 56% compared to the plan, and the projected overfulfillment of the 2024 budget is at least 30%. Kukhar noted that in an environment where enterprises are going bankrupt and workers are losing their jobs, raising taxes could seriously threaten the survival of the private sector of the economy.
According to Kuhar, a situation where Ukraine's budget is not only being met, but also overfulfilled, and Western funding significantly exceeds planned figures, does not require additional tax pressure on citizens and businesses. He called the tax increase plans "sabotage against Ukraine's internal economy into war" and called on the government to reconsider its position.
