The Verkhovna Rada Committee on Finance, Taxation and Customs Policy recommended that the parliament adopt the revised bill on increasing tax rates in the second reading, said first deputy head of the committee Yaroslav Zhelezniak (the Holos faction).

According to the information published on Telegram, bill No. 11416d was supported by 19 committee members, three abstained, and one was against.

"The consideration in the hall is next week, it will be signed in the second half of October… but some of the rules will come into force retroactively, from October 1," the MP emphasized.

According to Zhelezniak, the provisions regarding the increase in the military tax (MT) from 1.5% to 5%, the introduction of the MT for individual entrepreneurs, an increase in the tax on profits of banks to 50%, and an increase in the tax on lands remained for the second reading.

The provision on increasing the tax rate on profits for financial institutions (except insurers) from 18% to 25% also remained.

In addition, the bill proposes to exempt funds from national cashback from taxation and an increase in royalty for the extraction of crushed stone.

At the meeting, it was also decided to leave the provision on the transition from quarterly to monthly reporting on personal income tax, but the date of entry into force of this decision is proposed to be moved from November 1, 2024 to January 1, 2025.

As reported, in July, the Cabinet of Ministers submitted to the Verkhovna Rada bill No. 11416 on increasing the expenditures of the 2024 state budget by UAH 434.6 billion. The document assumed that these expenses would be provided by UAH 214.5 billion in additional revenues and UAH 220.1 billion in additional financing: UAH 160.2 billion from an increase in the sale of government bonds to banks and UAH 59.8 billion from a reduction in payments to repay the state debt.

The bill envisaged amendments to the Tax Code and other laws on the specifics of taxation during the period of martial law, and also assumed an increase in revenues from tax increases in the amount of UAH 125 billion, as expected, this year and UAH 341.9 billion next year.

Some provisions proposed by the government in bill No. 11416 were met with criticism by businesses, as a result of which a revised version of the document appeared.

The bill included mobile communications, the purchase of cars, real estate and jewelry among the "luxury items" for additional military tax. In autumn 2023, the bank profit tax was increased one-time from 18% to 50% retroactively for the entire year, while for subsequent years it was set at 25%.

Later, on September 17, 2024, the Verkhovna Rada adopted in the first reading revised resource bill No. 11416-d on increasing military tax from 1.5% to 5% from October 1. It is expected that due to the inclusion in the bill of a provision on increasing the bank profit tax to 50% and its support by the Ministry of Finance, the proposed tax initiatives will bring UAH 58 billion to the 2024 state budget, and UAH 137 billion to the 2025 state budget.

In turn, the bill was criticized by the EBA, the Federation of Employers of Ukraine, the Union of Ukrainian Entrepreneurs, the American Chamber of Commerce in Ukraine, the Independent Association of Banks of Ukraine, and the Forum for Leading International Financial Institutions (FLIFI), which proposed to draw the state's attention to the shadow sector instead of raising tax rates.