The Ukrainian government is developing a long-term fiscal policy strategy for the post-war reconstruction period. According to the updated Memorandum on Economic and Financial Policy, which is part of the cooperation program with the International Monetary Fund (IMF), the country is considering the introduction of a new reconstruction tax.
Replacing the War Levy
A key element of the new strategy will be the replacement of the current 5% war levy. The document emphasizes that the current rate will remain in effect for three years after the official end of martial law. However, the authorities intend to prevent a reduction in budget revenues after the cancellation of this temporary measure.
The memorandum contains a direct quote explaining the government's logic: "After extending the 5% war tax rate for three years after the end of martial law, we will ensure that revenues do not decrease after this measure expires. One of the options we are considering is the introduction of a reconstruction tax instead of the war tax, which we will include in the legislation regulating the transition from martial law".
Lack of Details and Negotiation Context
At present, the document does not contain specific details regarding the future rate of the new tax or the mechanism for its collection. This decision remains under discussion and requires further development within the framework of legislative initiatives.
The decision on tax reforms is being made against the backdrop of successful interaction with international partners. Recently, the IMF approved the first review of the Extended Fund Facility program for Ukraine. Thanks to this step, the country's state budget will be replenished by $690 million. The total amount of funds received under this program will reach $2.2 billion.
Changes in the Tax Calendar
As part of the coordination of cooperation conditions with the IMF, adjustments were made to other tax obligations as well. In particular, the fund agreed to postpone the deadlines for introducing the value-added tax (VAT) for individual entrepreneurs (sole proprietorships). According to the new agreements, the law should come into force not in January 2027, as previously planned, but in January 2028.
