The authorities are resorting to a politically unpopular move as they scramble to raise funds for the grueling military effort against Russia.
The Ukrainian Parliament voted on Thursday to approve its biggest tax hike since Russia’s full-scale invasion began more than two years ago, resorting to a politically unpopular move to raise funds for its grueling war effort.
The bill increases a tax on personal income that raises money for military expenditure, raising the rate to 5 percent, from 1.5 percent. It also retroactively doubles taxes on bank profits, to 50 percent for this year, and raises taxes on the profits of other financial institutions to 25 percent, from 18 percent, among other provisions.
The tax rise approved on Thursday will help to fund a $12 billion military spending increase for this year. Yaroslav Zhelezniak, deputy chairman of the parliamentary committee on finance, tax and customs policy, called it a “historic tax increase.”
The move is likely to hit hard in Ukraine, where people have already seen their economic well-being plummet because of the war. But the authorities argue that they have no choice if Ukraine is to sustain its fight against Russia, which has ramped up its own military expenditure. President Volodymyr Zelensky of Ukraine is expected to ratify the bill in the coming days.
Oleksii Movchan, a member of Mr. Zelensky’s party and the deputy chairman of the parliamentary committee on economic development, acknowledged that the bill was “unpopular.”
“We will be hated, but we don’t have any other option,” he said. “It’s about our survival in this war.”
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Source: Elections - nytimes.com
