The Ukrainian government held detailed consultations with IMF representatives regarding ways to increase domestic revenues for the state budget in 2026. Among the discussed options are a possible increase in the VAT rate, a transition to a progressive personal income tax (PIT), as well as strengthening measures to de-criminalize the economy. About this informs Forbes.
One of the participants of the consultations reported on the potential increase in VAT. This information was also confirmed by two other officials involved in the discussions. The option of introducing a progressive scale of personal income tax was also considered – a model according to which citizens with higher incomes are subject to higher tax rates. In addition, the issue of the possible introduction of a “luxury tax” was briefly discussed in Washington.
The personal income tax reform and revision of the simplified system are already enshrined in the National Revenue Strategy until 2030, which was approved by the Cabinet of Ministers at the end of 2023. However, specific terms or mechanisms for the implementation of these measures were not discussed during the consultations – only general approaches were discussed.
We will remind you that in October 2024 the Verkhovna Rada adopted a decision to increase tax rates, which did not affect VAT. The main increase in revenues to the budget is expected due to the increase in the military levy from 1.5% to 5% and the increase in the income tax rate for banks from 25% to 50%.
