---
title: "Insurance in a Deadlock: Business Relief Fund Hits Tax and Funding Walls"
description: "The government has allocated 58.7 billion hryvnias in the 2027 budget to compensate wartime business losses through a VAT hike to 21%, but the initiative faces tax and financial barriers."
date: 2026-09-30T04:02:00.000Z
lang: en
url: https://xab.info/en/posts/insurance-in-a-deadlock-business-relief-fund-hits-walls
tags: [economy, ukraine-budget, business-insurance, war-risks, taxes]
publisher: "XAB.info"
---

# Insurance in a Deadlock: Business Relief Fund Hits Tax and Funding Walls

![Graphic representation of government plans for business war risk insurance](https://xab.info/media/2026/09/30/strahovanie-v-tupike-fond-pomoshchi-dlya-biznesa-upersya-v-nalogi/strahovanie-v-tupike-fond-pomoshchi-dlya-biznesa-upersya-v-nalogi-1.webp)

## 🎯 Key Points

- The 2027 budget draft includes 58.7 billion hryvnias for business war risk insurance.
- Funding relies on raising VAT from 20% to 21% and attracting donor funds.
- Experts warn about the lack of necessary bills in parliament.
- The First-loss model aims to cover initial damages, but a $10 million limit may not suit everyone.

The Ukrainian government has included a large-scale initiative in the 2027 state budget draft to compensate businesses for wartime losses amounting to 58.7 billion hryvnias. The Ministry of Economy expects this program to help attract between 2 and 4 billion dollars in international donor funds, providing domestic enterprises with up to $10 million to restore assets destroyed by missile strikes. ### Financial Sources and Budgetary Risks

The primary source of funding for the new fund is planned to be an increase in the standard VAT rate from 20% to 21%. However, KSE Institute experts highlight severe risks: out of 131.3 billion hryvnias in additional revenues from tax measures, only 14 billion are backed by existing legislation. The remaining funds require new parliamentary decisions that have not even been registered in the Verkhovna Rada yet.

### First-Loss Model and Commercial Market Limitations

The state-proposed scheme relies on the First-loss principle, where the budget absorbs the first layer of wartime losses, creating space for commercial insurance. According to Ministry of Economy estimates, annual business asset losses range from 4 to 10 billion dollars, while the capacity of the entire classical insurance and reinsurance market does not exceed 1 billion dollars. Meanwhile, 94% of Ukrainian companies still lack adequate coverage.

### Contradictory Data

During the discussion of the initiative, noticeable discrepancies emerged regarding implementation timelines and funding volumes. While the Ministry of Economy leadership declares plans to launch the program strictly from January 1, 2027, provided sources are found promptly, independent analytical centers emphasize the absence of necessary bills in parliament. Furthermore, business representatives point out that the $10 million limit is insufficient for large critical infrastructure enterprises requiring special portfolio insurance mechanisms.

### Expert Evaluations and Recovery Prospects

Business associations and the expert community have mixed views on the idea of raising taxes to establish the fund. On one hand, entrepreneurs urgently need asset protection in frontline territories and major cities, where classical commercial insurers have completely withdrawn programs due to undiversified risks. On the other hand, additional fiscal pressure in the form of higher VAT could negatively impact the overall competitiveness of the economy.

## 🔍 Fact-Check Verification

- [Страхование в тупике: фонд помощи для бизнеса уперся в налоги и нехватку денег](https://www.rbc.ua/ukr/news/strahuvannya-gluhomu-kuti-uryadoviy-fond-1790594836.html) - Основной источник информации о деталях правительственной инициативы и позиции Минэкономики.
- [Правительство планирует повысить налоги, чтобы компенсировать бизнесу потери от атак РФ](https://delo.ua/ru/news/nds-mogut-povysit-do-21-dlya-fonda-kompensacii-biznesa-posle-obstrelov-472385/) - Подтверждает планы повышения НДС до 21% для наполнения фонда.
- [Острый вопрос: повысим ли НДС до 21%? Известные бизнесмены — о том, как создать и наполнить фонд ...](https://biz.nv.ua/economics/povyshenie-nds-do-21-procenta-soglasny-li-predprinimateli-na-novyy-nalog-50645728.html) - Отражает дискуссию среди предпринимателей относительно целесообразности нового налога.
- [Набиуллина оценила вклад повышения НДС в инфляцию в 1 п. п.](https://www.dp.ru/a/2026/03/24/nabiullina-ocenila-vklad-povishenija) - Подтверждено по источнику dp.ru

## ❓ FAQ

### Q: What amount is allocated in the budget for business war loss compensation?
**A:** The 2027 budget draft allocates 58.7 billion hryvnias for the business support program.

### Q: How is the compensation fund planned to be financed?
**A:** Plans include raising the VAT rate from 20% to 21% and attracting $2–$4 billion in international donor assistance.

### Q: Why is the program under threat?
**A:** Most tax revenues required for the fund necessitate new laws that have not yet been registered in parliament.