---
title: "Is it realistic to lower VAT on socially important goods: experts evaluate Terekhov's initiative"
description: "The initiative to lower VAT on food and medicines to 5% has divided experts: some see it as salvation from poverty, others fear a blow to the defense budget."
date: 2026-10-09T13:14:00.000Z
lang: en
url: https://xab.info/en/posts/is-it-realistic-to-lower-vat-on-socially-important-goods
tags: [vat-tax, economy, ukraine, poverty, terekhov]
publisher: "XAB.info"
---

# Is it realistic to lower VAT on socially important goods: experts evaluate Terekhov's initiative

![Discussion on lowering VAT on social goods and food products in Ukraine](https://xab.info/media/2026/10/09/realno-li-snizit-nds-na-sotsialno-vazhnye-tovary/realno-li-snizit-nds-na-sotsialno-vazhnye-tovary-1.webp)

## 🎯 Key Points

- Igor Terekhov proposed lowering VAT on social goods and medicines to 5%.
- The poverty rate in Ukraine according to World Bank data rose to 41.6% in 2025.
- Experts are divided: some support the measure to protect the poor, others warn of risks to the budget and defense.

The initiative of Kharkiv Mayor and Head of the Association of Frontline Cities and Communities Igor Terekhov to lower the Value Added Tax rate to 5% on basic food products and medicines has sparked a wide discussion among Ukrainian experts. Amid the approaching economic crisis and rapid price growth driven by logistics and energy factors, finding effective tools to protect vulnerable population groups has become a primary state task.

### Arguments of supporters: preventing a humanitarian catastrophe

Supporters of easing the fiscal burden on social product groups are convinced that this is the only effective mechanism to cushion prices for the poorest citizens. As emphasized by economist and financial analyst Oleksandr Kushch, stopping the inflationary wave without such preventive measures will be extremely difficult. Moreover, the rapid impoverishment of society threatens to destroy social solidarity and create a dangerous property stratification, where the majority of citizens fall below the poverty line against a narrow stratum of wealthy people.

### Controversial data

There is no consensus in the expert community regarding the feasibility of implementing this idea in current realities. Some analysts, including financial expert Serhiy Fursa, categorically state that Ukraine during a full-scale war cannot afford to reduce tax revenues. A similar position is held by Illia Neshchodovskyi, an independent expert of the ANTS National Interest Advocacy Network, who warns of the risks of cutting the budget for army financing and the emergence of gray tax evasion schemes. At the same time, supporters of the innovation recall the positive experience of 2022, when lowering VAT on fuel helped stabilize the market and reduce social tension.

### Problem context and macroeconomic indicators

The discussion unfolds against the backdrop of alarming World Bank statistics, according to which the poverty rate in the country in 2025 reached 41.6%, almost doubling compared to the pre-crisis year of 2021. In such conditions, Igor Terekhov's initiative is viewed as an attempt to provide a comprehensive response to the systemic challenges of wartime. Nevertheless, the government will have to find a delicate balance between the need for social support of the population and ensuring uninterrupted financing of the security and defense sectors.

## 🔍 Fact-Check Verification

- [Реально ли снизить НДС на социально важные товары – что говорят эксперты об инициативе Терехова](https://www.rbc.ua/ukr/news/chi-realno-zniziti-pdv-sotsialno-vazhlivi-1791551422.html) - Основной материал с комментариями экспертов Куща, Фурсы и Несходовского.
- [Снижение НДС на основные продукты питания и лекарства: Терехов представил меры по борьбе с ...](https://www.obozrevatel.com/novosti-obschestvo/snizhenie-nds-na-osnovnyie-produktyi-pitaniya-i-lekarstva-terehov-predstavil-meryi-po-borbe-s-bednostyu.htm) - Детали инициативы Игоря Терехова о снижении налогов.
- [Терехов: Снижение НДС на продукты питания — важный шаг в борьбе с бедностью](https://focus.ua/ukraine/764943-terehov-snizhenie-nds-na-produkty-pitaniya-vazhnyy-shag-v-borbe-s-bednostyu) - Заявления Терехова о борьбе с бедностью через налоговые механизмы.
- [Снижение НДС на продукты, рост пенсий и зарплат: Терехов предложил, как бороться с бедностью](https://www.obozrevatel.com/ekonomika-glavnaya/snizhenie-nds-na-produktyi-rost-pensij-i-zarplat-terehov-predlozhil-kak-borotsya-s-bednostyu.htm) - Детали инициативы Игоря Терехова о снижении налогов.

## ❓ FAQ

### Q: Who proposed lowering VAT on social goods?
**A:** Kharkiv Mayor and Head of the Association of Frontline Cities and Communities Igor Terekhov initiated lowering the VAT rate to 5% on basic food products and medicines.

### Q: What are the arguments of supporters of the VAT reduction?
**A:** Supporters believe this is the only way to cushion the approaching price crisis for the poorest segments of the population and prevent dangerous social stratification.

### Q: Why do opponents oppose tax cuts?
**A:** Opponents point to the risk of reducing state budget revenues, which is critical for financing the army during the war, as well as the likelihood of gray schemes emerging.