Ukraine's parliament votes to increase taxes

Draft law No. 11416-d provides, in particular:

• an increase in taxes for group 1, 2, 4 sole proprietors, a military levy of 10% is also established for them;
• introduction of advance payments for gas stations;
• establishment of 1% income tax for group 3 sole proprietors;
• establishing a 25% profit tax for non-bank financial institutions;
• monthly reporting on personal income tax.

At the same time, the legislators rejected an amendment to increase the military levy for military personnel — it will remain at the level of 1.5% instead of the proposed 5%.

Tax increases

The Cabinet of Ministers approved changes to the state budget for 2024, according to which defense expenditures will increase by 495.3 billion hryvnias ($12 billion). That is, taxes may increase because Ukraine's international partners do not finance its military expenditures. Tax money is used for this along with domestic borrowing. They are a "crucial source" of financing military operations, the Ministry of Finance stated.

Most of the funds to cover additional defense costs are planned to be obtained thanks to the increase in state budget revenues by more than 214 billion hryvnias ($5.2 billion). Also, Ukraine will have to borrow more than 160 billion ($3.9 billion) on the domestic market. More than 60 billion hryvnias ($1.5 billion) are planned to be cut from the costs of servicing the state debt.

At the same time, the government initiated changes to the Tax Code.