The Ukrainian government is not considering the possibility of raising taxes in 2026 to cover the state budget deficit. This was stated by the head of the Verkhovna Rada Committee on Finance, Danilo Hetmantsev. He assured that despite the significant shortage of funds in the budget, an increase in the tax burden is not planned.
This is reported by Finway
Main Sources for Covering the Deficit
According to Hetmantsev, the budget deficit this year amounts to about 500 billion hryvnias. However, there is confidence that this “gap” can be filled without increasing taxes, and a similar strategy will remain relevant for 2026, when an even larger deficit is projected, not covered by external financial assistance.
Hetmantsev identifies the main tool for filling the budget as the de-shadowing of the economy. It is planned that through these measures, an additional approximately $4 billion, equivalent to 160-170 billion hryvnias, will flow into the budget in 2025. He emphasized that raising taxes without addressing the shadow sector of the economy would only create pressure on honest businesses.
“Raising taxes without de-shadowing the economy will negatively impact honest businesses,” Hetmantsev noted.
Additional Sources of Funding and Expert Assessments
Among other possible sources for covering the budget deficit, the issuance of military bonds and the so-called “fiscal savings” are being considered. The latter involves optimizing expenditures, particularly by cutting ineffective budget programs, which could free up to 50 billion hryvnias.
According to the forecast of the Organisation for Economic Co-operation and Development (OECD), the budget deficit of Ukraine will remain at around 20% of GDP in 2025 and 2026. In 2025, this deficit will primarily be covered by external assistance, particularly through the ERA mechanisms from G7 countries and the Ukraine Facility from the European Union.