The war between Russia and Ukraine has entered its 34th month. On Thursday, November 28th, Ukrainian President Zelensky signed a bill imposing wartime taxes in Ukraine for the first time.
The government has increased the wartime personal income tax rate for residents from the current 1.5% to 5% and imposed wartime taxes on tens of thousands of private businesses.
Additionally, the government will raise certain rental payments, levy a 50% tax on profits of commercial banks, and increase the profit tax on other financial institutions to 25%.
Ukrainian Finance Minister Marchenko stated that the bill is crucial to ensuring smooth funding for the Ukrainian Ministry of Defense next year. He mentioned that these measures will take effect from December 1st.
Marchenko further noted that Ukraine’s military expenditure accounts for about half of the country’s annual budget. The government’s target for military spending next year is approximately 2.2 trillion hryvnias, similar to this year.
These tax-raising measures are expected to generate around 140 billion hryvnias (approximately $3.4 billion) in additional revenue to support Ukraine’s defense spending against Russia.