Ukraine’s leading business associations — the European Business Association, the Independent Association of Banks of Ukraine, and the Forum of Leading International Financial Institutions — have appealed to the Verkhovna Rada to reject Draft Law No. 14097, which proposes a temporary increase in the corporate tax rate for banks to 50%. The official letter was addressed to Speaker Ruslan Stefanchuk and members of parliament.
The bill, initiated by Danylo Hetmantsev, Head of the Parliamentary Committee on Finance, Tax and Customs Policy, seeks to double the tax rate for the banking sector while prohibiting the use of previous years’ losses to reduce taxable income. According to the business community, such a measure is economically risky and contradicts the constitutional principle of tax stability established by the Constitutional Court of Ukraine.
Representatives of the banking sector emphasize that the increased tax burden would hinder the accumulation of capital buffers necessary to meet EU integration requirements and strengthen financial resilience. It could also restrict lending to businesses and households, threatening economic recovery. The National Bank of Ukraine estimates that at least nine banks, including two state-owned institutions, must undertake recapitalization measures, and most of them would be unable to fulfill these requirements under the proposed legislation.
Business associations also argue that the proposed law violates the principle of fair competition, as the banking sector has already been subject to a tax rate more than double that of other industries — 50% compared to 18% — for the past three years. In 2023–2024 alone, banks contributed over UAH 170 billion in corporate taxes to the state budget, demonstrating their significant role in maintaining the country’s fiscal stability.
The business community further warns that adopting this bill would undermine Ukraine’s investment attractiveness, particularly ahead of the planned privatization of state-owned Sense Bank and Ukrgasbank. Frequent tax changes erode investor confidence and create persistent uncertainty for both domestic and international businesses.
Entrepreneurs and financial institutions are calling for an open dialogue between the government, business, and the banking sector to find balanced solutions for budget revenue generation without harming financial stability or economic growth.
GR Consulting Comment: The situation underscores that tax policy initiatives must be developed through comprehensive dialogue and coordination with the market. The absence of stable and predictable tax conditions may have long-term negative consequences for credit activity, investment flows, and Ukraine’s economic recovery.
