Will there be a new tax increase in 2025: plans of the Ministry of Finance

At the end of 2024, the Ministry of Finance does not consider it necessary to raise taxes for Ukrainians again next year and in the future. This year's decision was forced and a compromise. This was stated by Finance Minister Sergii Marchenko, RBC-Ukraine reports citing a telethon.

"For the next year, we do not plan to propose any tax increases. We have no such plans," he said.

According to him, the current plans of the fiscal department "give us a basis to say that we do not plan to do this, and we would prefer to avoid these steps in the short term.

According to the minister, the Ministry of Finance understands that these are rather painful steps for Ukrainian citizens and businesses.

Rationale for the tax increase in 2024

Marchenko said that the tax increase "was a painful decision". "It is quite a compromise. From the point of view of me as the Minister of Finance, the compromise we reached only partially satisfied our needs," he said.

According to him, the key task was to equalize this balance between the needs of the Armed Forces and our capabilities.

"And this year, I'm sorry, we have no other sources than to finance our Armed Forces at the expense of taxes. The amount of domestic borrowing also has its own nature and certain limitations. That is, we cannot inflate borrowings indefinitely, we had to rely on some stable base," he added.

Marchenko hopes that the tax increase will find understanding. "Because even talking to business representatives and citizens, we understand that this is not an unbearable burden, knowing that every hryvnia they pay will go to the Armed Forces," he said.

Tax increase

As a reminder, the law on tax increases came into effect on December 1. The main point of the law was to increase the military tax rate on all Ukrainians' income from 1.5% to 5%.

In addition, the law obliges individual entrepreneurs to pay the military tax. They will do so starting January 1.

Author: Oleksandr Bilous