The Ukrainian Parliament has proposed a new tax for banks, providing UAH 10B to the budget.

The parliament’s tax committee is preparing a draft law that allows for additional taxation of net interest income or excess bank profits. “Most likely, the new law will come into effect in 2024 and bring UAH 10B to the budget annually,” said Committee Chairman Danylo Hetmantsev.

Parliamentarians are considering two options: a tax on all net interest income received in a year at a relatively low or moderate rate or a tax on the difference between the net interest income in the reporting year and the average of the last three to four years.

Hetmantsev proposes to introduce the tax temporarily on January 1, 2024 for two years, given the need for additional financing of defense costs. Notably, Ukrainian banks’ profits for the first seven months of the year was UAH 83.2B. This is the highest figure for at least 15 years.