Under pressure from the IMF, Ukraine prepares law to increase military levy on Ukrainian entrepreneurs

Under pressure from the IMF (with the memorandum with Kyiv already signed), a law is being prepared to increase the military levy on Ukrainian entrepreneurs.

Telegram channels report this.

Thus, the Ukrainian authorities are preparing to raise taxes for individuals and businesses. The first to face increased rates will be individual entrepreneurs. As stated by the head of the relevant committee of the Verkhovna Rada, Daniil Hetmantsev, this month the Cabinet of Ministers of Ukraine will submit to parliament a bill on an additional military levy for entrepreneurs. The proposal involves introducing a military levy of 1.5% of turnover for third group entrepreneurs (currently they do not pay a military levy). There is a possibility that the military levy will also be increased for entrepreneurs in the first and second groups (who currently pay the standard 1.5%).

And this is just the beginning: the updated memorandum with the IMF includes a structural benchmark — to find sources for “mobilization” in the budget of no less than 0.5% of GDP (which is about 40 billion hryvnias, nearly 1 billion euros). Ukraine was supposed to fulfill this task by the end of February 2024. Moreover, what is even more important, the government needs to find additional sources to replenish the treasury at a time when a significant portion of assistance from Western partners is in question.

As Hetmantsev stated, the government will prepare a “complex of proposals” to increase the revenue part of the budget by 44 billion hryvnias (over 1 billion euros). Among other things, this includes:

• Additional tax on the purchase of bank metals,
• Additional levy on the first registration of cars in Ukraine,
• Additional levy on the sale of real estate,
• Additional levy on the sale of jewelry,
• Excise tax on sweet and carbonated mineral waters,
• Additional levy on mobile operators,
• Increase in fuel excise taxes to minimum European rates, and so on.

At the same time, inconsistency, lack of trust, and the return to the ideology of aggressive tax collection are negative, if not fatal, “companions” for the economic recovery of a country at war. This will lead to nothing but driving a significant portion of the business further into the shadows and transitioning to gray schemes of settlement.