The Ukrainian government proposes new taxes
The Ukrainian government is considering the introduction of new taxes, including a military levy on income at a rate of 5% and a mandatory contribution from the income of all businesses in the country at a rate of 1%. This will lead to an increase in the tax burden, especially for individual entrepreneurs. Plans also include introducing a tax on the sale of real estate and vehicles. MP Yaroslav Zheleznyak announced that the draft law on these changes is currently being reviewed by the Cabinet of Ministers.
The need for increased defense spending
«The army needs 500 billion hryvnias, or about 12 billion US dollars. This is necessary to meet the basic needs of the army and maintain parity with the Russian Federation,» says senior economist Yuri Haidai from the Center for Economic Strategies.
Concerns about the impact of increased taxes
Executive Director Hlib Vyshlinsky of the Center for Economic Strategies believes that the increase in the military levy will result in a decrease in real wages for workers and potentially increase informal employment. Senior Economist Volodymyr Dubrovsky from CASE Ukraine warns that it may also lead to a rise in the shadow economy, as many workers already evade taxes. Tax consultant Oleksandra Tomashevska points out that tax evasion on the scale of income tax is a challenge for any tax system in Ukraine, and increasing this tax could make shadow work more attractive.
