Parliament speaker: Ukraine may raise taxes in September for military funding
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Ukraine will likely begin discussing tax increases in September 2024, Parliament Speaker Ruslan Stefanchuk said in TV interview on Aug. 17.
Stefanchuk emphasized the need to increase taxes to pay military salaries, stating that discussions in Parliament would focus on how to collect the necessary funds.
Stefanchuk expects the debate to revolve around two options: raising taxes for 50-60 sectors of the economy or applying tax hikes more broadly across all categories of Ukrainians. He personally believes that a broad-based approach would be fairer, with minimal increases on taxes like the value-added tax (VAT) and the military levy.
Ukraine’s 2024 state budget, approved by the Verkhovna Rada, includes a significant deficit of 1.57 trillion UAH, or 20.6% of the projected GDP. The government has been discussing raising taxes to fill the budget gap, particularly to fund the military. In July, the Cabinet approved amendments to the 2024 budget, increasing expenditures by 500 billion UAH and introducing tax changes worth 140 billion UAH. Stefanchuk hinted that raising the VAT might be a simpler option to implement.
Government discussions on tax increases
In late May 2024, Danilo Hetmantsev, head of the parliamentary finance committee, stated that tax hikes were necessary to ensure budget stability, with a particular shortfall of 300 billion UAH needed to fund the military. The Finance Ministry also indicated that the military levy on certain transactions could reach 30% after the tax increases.
In July, Stefanchuk reiterated that tax increases were inevitable in one form or another and hinted that the VAT hike would likely be among the first measures to be passed.
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