How will interest rates on loans and deposits change because of the increased bank income tax?

The increase in the bank profit tax from 18% to 50% in 2023 and 25% in the following years may provoke an increase in loan rates by financial institutions and a decrease in deposit rates to ensure stable profitability in the new tax environment, said the President of the Association of Ukrainian Banks (AUB) Andriy Dubas.

“I think that banks will analyze the current situation and build their business model, their activities to continue to be profitable,” he said.

Speaking about the association’s position regarding the adopted law, he said, “In wartime conditions, the volume of taxes may increase, but, in our opinion, it is not very correct to tax the previous period.”

Dubas also noted that the association supports the introduction of additional taxation only for a limited period.

Raiffeisen Bank Board Chairman Oleksandr Pisaruk emphasized that the law on increasing bank income tax was adopted without any discussion with banks. He added that it is discriminatory and has long-term negative consequences for the investment and business climate in Ukraine.