The Ministry of Finance of Ukraine is developing a draft law on raising the military levy and the value added tax (VAT) rate. In addition, it is planned to make the military levy mandatory for individual entrepreneurs.
The Chairman of the Committee on Finance, Tax and Customs Policy of the Verkhovna Rada of Ukraine, Danylo Hetmantsev, 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:
- An increase in the military levy from 1.5% to 5%;
- Introduction of a tax rate of 5% for the FOP of the third group;
- A probable increase in the level of VAT 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 300 billion hryvnias are needed, and another 400 billion hryvnias are needed for the purchase and repair of military equipment.
According to Forbes, an increase in the military tax rate from 1.5% to 5% for employees can bring 90-100 billion UAH per year to the budget. An increase in the VAT rate by one percentage point can add approximately UAH 40 billion in additional annual revenues. If the VAT increase is by 2 or 3 percentage points, budget revenues will increase by UAH 70-80 billion and UAH 100-120 billion, respectively.
