Broadening the tax base and raising rates: the Government's plans in tax policy

People's Deputy Nina Yuzhanina, expressed her opinion on the provisions of the Budget Declaration for 2025-2027, approved by the Cabinet of Ministers of Ukraine on June 28, 2024, No. 751.

The MP notes that in terms of tax policy, the declaration provides for the continuation of "refraining from introducing any tax and administrative measures that may adversely affect the tax revenue base."

It is also noted that one of the priorities of tax policy in the short term will be to expand the current military tax base, including revision of the amount of the tax, the range of its payers, the tax base and objects of taxation.

In 2025-2027, the following measures from the National Revenue Strategy 2030 will be implemented:

♦ revision of investment incentive regimes with the aim of abolishing corporate income tax exemptions and introducing instant depreciation rules instead;

Gradual approximation of excise tax rates on tobacco products and fuel to the level stipulated by EU directives, bringing tax privileges and reduced VAT rates in line with the requirements of EU directives;

♦ bringing the provisions of the national legislation in line with the requirements of the EU legislation in terms of combating tax evasion and corporate tax;

Introduction of an excise tax on sugar-sweetened beverages;

♦ granting additional powers to local governments in terms of administration of local taxes and fees;

introduction of a unified approach to the use of tax incentives.

The customs policy priorities for the next 3 years are much smaller, all of which are also from the National Revenue Strategy until 2030:

Measures will be taken to:

► harmonization of the customs legislation of Ukraine with the EU legislation;

► strengthening anti-corruption measures and increasing trust in the customs authorities;

► support and cooperation with business;

► development of international customs cooperation;

► institutional development of the customs authorities;

IT development and provision of technical means of customs control.

There is no mention of the draft law 6490-d, adopted in the first reading, but the obligations to creditors include this project.

The photo shows what the measures included in the revenues of the state and local budgets for 2025-2027 will bring (how much money they will bring).

The following legislative provisions were also taken into account when developing the budget revenue forecast for the medium term

• allocation of the "military" personal income tax in the amount of 75% in the respective territory of Ukraine and 40% in the territory of Kyiv to the special fund of the state budget;
• quarterly accrual and payment of bank profit tax at the rate of 25%;
• preservation of the distribution of the fuel excise tax between the state and local budgets, namely, the transfer of 13.44% of such tax to the budgets of territorial communities;
• applying differentiated rent rates for natural gas while maintaining the rates for oil and gas condensate;
• transfer of 95% of the rent for the use of subsoil for the extraction of minerals of national importance (natural gas, oil and gas condensate) to the state budget and 5% to local budgets at the place of extraction.

In 2025, the amount of profit transferred by the NBU to the state budget is projected to increase to UAH 34.4 billion (UAH 16.7 billion more than the figure approved in the budget for 2014), followed by a gradual increase in 2026 to UAH 36.3 billion and in 2027 to UAH 58.9 billion.

And where is the tax increase "sewn" into the document (except for the military fee, which I wrote about in one of my previous posts)? "At the same time, for stable and continuous financing of the priority needs in the field of security and defense of the state against armed aggression, it is necessary to develop an additional package of measures for 2025-2027, taking into account the priorities of tax policy for the respective years, which would provide public finances with a resource of about UAH 340 billion annually."