Parliament Approved an Increase in Defense Forces Expenditures Overall and Supported the Tax Bill as a Basis

Today, on September 18, the Parliament of Ukraine approved amendments to the 2024 state budget to increase expenditures for the security and defense sector by UAH 495.3 billion. At the same time, the draft law amending the Tax Code, which is systematically linked to the budget changes, was supported in the first reading.

Expenditures for the Security and Defense sector are set at UAH 495.3 billion.

Additionally, a redistribution of UAH 2 billion has been allocated to the Ministry of Education and Science of Ukraine to ensure nutrition for primary school students.

The sources of funding for the additional expenditures include several measures, specifically:

1. Increasing revenues in the general fund of the state budget due to exceeding the planned revenues from January to August 2024.
2. Reducing expenditures on servicing and repaying public debt.
3. Increasing the plan for placing domestic government bonds.
4. Reducing some expenditures in the general and special state budget funds.
5. Implementing additional tax measures through changes to the Tax Code, which include:

• Increasing the military tax rate for individuals from 1.5% to 5%;
• Introducing a military tax for individual entrepreneurs in groups 1, 2, and 4 at 10% of the minimum wage;
• Establishing a 1% military tax for single tax payers in group 3;
• Increasing the corporate profit tax rate for financial companies to 25% starting from 2025;
• Implementing monthly advance payments for gasoline stations;
• Imposing a 50% corporate profit tax on banks;
• Changing the tax reporting period for personal income tax from quarterly to monthly.

We expect the Parliament of Ukraine to support the changes to the Tax Code in full in the near future.