Tax and interest deductions from the economy for 2022-2023 in Ukraine doubled. For example, tax revenues to the consolidated budget have increased by 110% over the past two years, thanks mainly to revenue from the military’s personal income tax, and income from the interest charged by banks has increased by 90% during the ten months of 2023, writes the former chairman of the Council of the National Bank Bohdan Danylyshyn.
As a result, a catastrophic situation arose with the multiplication of funds withdrawn from the real economy. According to Danylyshyn, Ukraine needs to expand its fiscal and monetary instruments to support the real sector of the economy.
Historical experience shows that the main financial resource of countries in a state of war was not taxes but loans, grants, and monetary aid. Taxes accounted for only 30% of the US government’s financial resources during the Second World War, and 20% during the First World War.
“In Ukraine, tax payments constituted 45% of all government resources in 2022-2023“, Danylyshyn added.