Ukraine Approves Tax Hikes to Fund War Effort

The Ukrainian parliament has approved a draft law to increase taxes on individuals, companies, and banks, effective immediately, to cover the soaring costs of the ongoing war with Russia, Bloomberg reports.

The bill, which passed its second reading on Thursday with 247 votes in favor, aims to address the growing budget deficit stemming from increased military spending. In July, the Ukrainian government amended the 2024 state budget law, increasing military expenditure by a staggering 500 billion hryvnia ($12 billion). However, the approved tax hike may not be sufficient to fully close the defense budget gap.

The initial draft of the bill, approved last month, proposed a tax increase of 58 billion hryvnia for 2023 and 137 billion hryvnia for 2025. However, the exact details of the tax increases and their potential impact on various sectors of the economy remain unclear.

This move underscores the immense financial strain Ukraine is facing.