The Ukrainian shadow economy is valued at $21.7B annually and combating it could contribute an additional $4B to the budget in 2025.

Danylo Hetmantsev, head of the Verkhovna Rada Finance Committee, revealed that the shadow sector is estimated at ₴800-900B ($21.7B). About 30-50% of the economy exists in the shadows, with some sectors exceeding 60%, which creates significant barriers to economic progress.

“In European countries, the shadow economy comprises only about 5-7%,” the politician explained. Hetmantsev noted that this new estimate is based on GDP growth.

He emphasized that addressing the shadow economy could generate approximately ₴400B in additional funding for the military. Importantly, there will not be any tax increases this year. Hetmantsev expects that through measures to mitigate untaxed economic activity, fiscal authorities will secure $4B for this year’s state budget.

Simultaneously, Finance Minister Serhiy Marchenko acknowledged the necessity of boosting state budget expenditures in 2025 but pointed out that the deficit can be managed through domestic borrowing and enhanced tax administration, without increasing rates.