--- title: "Ukraine to Build a VAT Increase to 21% into the 2027 Budget: What Is Known About the New Tax to Support Business" description: "The 2027 budget draft builds in a possible VAT increase from 20% to 21% to insure business against military risks. The measure will require a separate law by the Rada; an alternative could be support from partners." date: 2026-09-15T19:38:00.000Z lang: en url: https://xab.info/en/posts/vat-increase-to-21-in-2027-budget-en tags: [ukraine, vat-increase, budget-2027, business-support, war-economy] publisher: "XAB.info" --- # Ukraine to Build a VAT Increase to 21% into the 2027 Budget: What Is Known About the New Tax to Support Business ![Female entrepreneur reviewing tax documents and invoices ahead of the VAT increase to 21% in Ukraine's 2027 budget](https://xab.info/media/2026/09/16/povyshenie-nds-v-byudzhet-2027/povyshenie-nds-v-byudzhet-2027-1.webp) ## 🎯 Key Points - The draft 2027 state budget builds in a possible increase of the standard VAT rate from 20% to 21%. - The resource of 58.7 billion hryvnias is intended for insuring business against military risks and supporting entrepreneurs. - The measure is not final: its application will require a separate law by the Verkhovna Rada. - An additional 8.3 billion hryvnias to protect the fuel business could be formed by raising the excise duty on fuel. - An alternative source for replenishing the business insurance fund could be support from international partners. The Government of Ukraine has included a mechanism for raising the value-added tax in the draft state budget for 2027. As reported by RBC-Ukraine, citing a publication by the Ministry of Finance, the rate increase is built in as a resource for launching business insurance against military risks and for providing additional financial support to entrepreneurs. At the same time, the Ministry of Finance stresses that for the measure to take effect, separate legislative regulation is required, i.e. approval by the Verkhovna Rada. ### What Is Built into the 2027 Budget Draft According to the Ministry of Finance's publication, a resource of 58.7 billion hryvnias is allocated in the draft state budget for the purpose of supporting entrepreneurship. "One of the possible sources for forming it is raising the standard rate by 1 percentage point — from 20% to 21%. A final decision on such a measure will require legislative regulation," the document states. Thus, the VAT increase is currently not an adopted decision but merely a scenario built into the draft, which still has to go through the parliamentary procedure. ### Why Raise the VAT: Insurance of Business Against Military Risks The intended use of the resource is to create a business insurance mechanism for companies suffering from Russian strikes. Recently, Economy Minister Oleksandr Khrachenko said that the Cabinet of Ministers is developing such a mechanism and plans to create a separate fund for it. According to the minister, the fund could be replenished both through support from international partners and by increasing the VAT. In parallel, the Cabinet announced the launch of preferential loans of up to 1 billion hryvnias to support business. ### The Fuel Business and Excise Duties In addition to the VAT, the government intends to allocate a further 8.3 billion hryvnias to protect the fuel business from military risks. According to the Ministry of Finance, this resource could be formed by raising the excise duty on fuel. Thus, the 2027 budget draft builds in two potential tax levers at once — on VAT and on excise duties, each of which requires a separate decision. ### The Scale of Damage from Attacks The justification for the new measures is the scale of the losses. According to an estimate by Economy Minister Oleksandr Khrachenko, the losses of Ukrainian business due to enemy attacks could reach 10 billion dollars. Prime Minister Serhiy Haidai, for his part, stated that due to attacks on business, the Ukrainian state budget has already failed to receive around 70 billion hryvnias. These figures form the fiscal context in which the government is seeking sources for compensation programs. ### Contradictory Data The statements of the parties contain significant uncertainty as to whether the VAT increase will be implemented at all. The Ministry of Finance formulates the measure as "one of the possible sources" for forming the resource and explicitly points to the need for legislative regulation, thereby reserving the right not to apply the increase. At the same time, Economy Minister Khrachenko did not rule out that the business insurance fund could be replenished through support from international partners — an alternative source that, if sufficiently large, could remove the need to raise the rate. In addition, open data feature two different damage estimates: 10 billion dollars — for business losses (Khrachenko) and around 70 billion hryvnias — for the state budget's lost revenues (Haidai); these are different metrics, but in the public sphere they are often presented as comparable. The final rate and funding sources will become known only after the adoption of the relevant law and the final version of the budget. ## 🔍 Fact-Check Verification - [Probable VAT Increase to Help Business Built into the 2027 Budget](https://www.rbc.ua/ukr/news/ymovirne-pidvishchennya-pdv-dopomogi-biznesu-1789472595.html) - Подтверждает заложение повышения НДС в проект бюджета-2027 и необходимость законодательного урегулирования. - [Government Built Tax Increases into the Budget: What It Plans to Change](https://delo.ua/ru/news/pravitelstvo-zalozilo-v-byudzet-povysenie-nalogov-cto-planiruyut-izmenit-472590/) - Подтверждает общую линию о заложенных в бюджет налоговых изменениях. - [VAT and Price Increases, Almost 5 Trillion for Defense and 53 Billion for Roads: The 2027 Budget Draft Is Published](https://tsn.ua/ru/groshi/povyshenie-nds-i-tsen-pochti-5-trln-na-oboronu-i-53-mlrd-na-dorogi-obnarodovan-proekt-byudzheta-2027-3169319.html) - Подтверждает обнародование проекта бюджета-2027 и включение в него повышения НДС. - [Government Intends to Raise Taxes in 2027: What Will Change for Ukrainians](https://www.unian.net/economics/finance/byudzhet-2027-goda-mozhet-prinesti-povyshenie-nalogov-nardepka-rasskazala-podrobnosti-13501071.html) - Подтверждает намерение правительства повысить налоги в 2027 году в рамках проекта бюджета. ## ❓ FAQ ### Q: By how much is the VAT planned to be raised in the 2027 budget draft? **A:** The Ministry of Finance provides for raising the standard rate by 1 percentage point — from 20% to 21%. ### Q: Is the VAT increase already an adopted decision? **A:** No. This is a scenario built into the budget draft. Its application will require separate legislative regulation and approval by the Verkhovna Rada. ### Q: What will the funds from a possible VAT increase be used for? **A:** The resource of 58.7 billion hryvnias is intended for launching business insurance against military risks and for additional financial support of entrepreneurs. ### Q: Is there an alternative to raising the VAT? **A:** Yes. Economy Minister Oleksandr Khrachenko did not rule out that the business insurance fund could be replenished through support from international partners. ### Q: What else is built into the 2027 budget draft to support business? **A:** The government intends to allocate 8.3 billion hryvnias to protect the fuel business (possibly through raising the excise duty on fuel) and has announced preferential loans of up to 1 billion hryvnias.