Ukraine has a $5B deficit in its budget for weapon purchases, so the government is preparing to raise taxes.

Ukraine’s state budget has an approximate $5B shortfall of what is needed to purchase weapons, Minister of Finance Serhiy Marchenko said, because over the past six months, Ukraine has received minimal military aid from its partners.

The Cabinet of Ministers is working on a bill to raise taxes against the increased military needs. In particular, the military levy is planned to be increased from 1.5% to 5%. A tax rate of 5% can also be introduced for sole proprietorships (FOP) operating on a simplified taxation system. An increase in VAT by 2-3 percentage points is also possible.

An increase in the military levy rate for salaried employees (without considering the introduction of the military levy for FOPs) can provide an additional ₴90-100B per year. Increasing the VAT rate by 2-3 percentage points will between ₴70-80B and ₴100-120B, respectively.

The chairman of the parliament’s tax committee confirmed that the state plans to raise certain taxes. According to him, this year there is a shortage of at least ₴300B ($7.5B) necessary to finance the army.