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Taxes and military levies will be raised in Ukraine

The Ministry of Finance is working on a draft law on tax increases, as up to UAH 500 billion is needed to support military needs. It is about increasing the value added tax and the military levy.

The military levy is planned to be increased from 1.5% to 5%.

The same tax rate of 5% can be introduced for individual entrepreneurs working on a simplified taxation system.

The level of VAT increase has not yet been finally decided. The probable increase is at the level of 2-3%.

The main reason for the possible increase in taxes is the increase in military needs.

According to the publication’s interlocutor in the parliamentary committee, the additional needs of the state budget are estimated at 400-500 billion UAH. According to Forbes calculations, an increase in the military levy rate from 1.5% to 5% for salaried workers (without taking into account the possible introduction of a military levy for the FOP) can bring an additional UAH 90-100 billion per year to the budget. A 1% increase in the VAT rate will provide about UAH 40 billion in additional annual revenues. In the event of a 2-3% increase in VAT, revenues to the budget may increase by 70-120 billion UAH.