Economist Mykhailo Kuchar criticized the proposal by the head of the parliamentary committee on finance, tax, and customs policy, Danilo Hetmantsev, to raise the bank profit tax from 25% to 50%. According to Kuchar, such an initiative poses a serious danger to the financial stability of Ukraine.
This is reported by Finway
Arguments Against the Tax Increase
Mykhailo Kuchar emphasized that during the four years of full-scale war, Ukraine’s banking system has demonstrated resilience, and no bank has gone bankrupt. Uninterrupted payments were ensured even in the first days of the invasion, thanks to the effective anti-crisis actions of the National Bank and the efforts of commercial banks.
“This is not an economic reform, but a large-scale planned sabotage on the economic front,” Kuchar wrote on Facebook.
The economist pointed out that 75% of the banking sector is already state-owned, and a significant portion of the profits from these institutions is directed to the budget in the form of dividends. In Kuchar’s opinion, the additional fiscal effect of the tax increase will be minimal: potential revenues will amount to only 12.5 billion UAH, which is equal to 1.25% of the budget surplus, which this year exceeded one trillion hryvnias.
Risks for the Banking System and Investments
Kuchar warned that increasing the tax rate could make the Ukrainian financial sector one of the least attractive in Europe. This would complicate the privatization of state banks and reduce the investment appeal of the sector after the war ends. In his view, such changes create risks for the capitalization and stability of the banking system, which could negatively impact businesses and citizens of the country.
In conclusion, Mykhailo Kuchar urged not to allow the implementation of Hetmantsev’s initiative in order to avoid undermining the financial foundation of the state.