Ukraine may not be able to find an additional ₴500B for defense needs.

Even with a proposed radical tax increase, Ukraine may not fully overcome the fiscal gap that must be closed for effective and timely financing of its military needs.

Analysts from RRR4U think tanks have noted that Ukraine is successfully fulfilling all its international obligations that finance priority expenditures which are not directly related to defense or security. These expenses will be paid in total this year. On the other hand, the ₴500B ($12B) of additional funds that the government announced it will require to finance defense measures currently do not have corresponding income.

“The additional need arose because the war’s active phase  lasted longer than expected when the budget was drawn up. Also, Ukraine has not received significant security assistance from the US for a while. So, Ukraine must find additional funding sources for the military by September. After all, in the fall, problems with budgetary resource for paying military salaries will begin,” said an expert from the Center for Economic Strategy, Maksym Samoiluk.