The current version of the draft law provides for an increase in the military tax from 1.5% to 5%, a 50% tax on bank profits in 2024, and 25% for non-bank financial institutions. The bill foresees additional revenue of ₴58B in 2024 and ₴137B in 2025.
However, business believes that the draft law’s adoption may lead to many negative consequences for the Ukrainian economy, in particular:
- Reduction of economic activity
- Increasing fiscal pressure on legal businesses
- Growth in consumer prices
- Reduction in consumer demand
- Expansion of the shadow economy
Ukraine’s budget loses out on about ₴400B ($10B) a year from the shadow economy, which increases the current shortfall. Therefore, it is necessary to take the following additional measures: strengthening the fight against the shadow economy, introducing stricter control of state expenditures, reducing non-defense spending, and increasing the efficiency of the tax service.