MOSCOW, September 27. /TASS/. Short on money and running out of options for how to raise it, the Ukrainian government is getting ready to hike taxes once again, Ukrainian Finance Minister Sergey Marchenko said during a discussion in Kiev.
"A tax increase in Ukraine is both necessary and unavoidable, […] there is just no other way. Domestic borrowing has reached a critical limit, because it only sustains the current system without generating new expenditures. Thus, all available funds are being used only to service and repay existing debts," the minister said, according to Ukrinform.
He also noted that Ukraine can no longer count on foreign loans: in the first quarter of this year, Ukraine received only one-tenth of the external aid it needed.
"This year, partners will provide $41.3 billion, and next year this figure is expected to be $38.4 billion. However, this does not mean that the payments are going to be stable," he underscored.
On September 17, Ukraine's Verkhovna Rada passed in the first reading a bill that would bring in an extra $1.4 billion in tax revenue in 2024 and $3.3 billion in 2025. The bill stipulates increasing the wartime fee from 1.5% to 5%, a tax increase on the first and second groups of individual entrepreneurs, advance fees for gas stations, a 1% tax on all third-group individual entrepreneurs, a 25% tax on profits of financial institutions, monthly reporting on personal income for all citizens, and a 50% income tax on bank profits. Previously, the media reported that IMF experts are also calling for a 2% increase in value-added tax.