#Tax Policy

The Cabinet of Ministers has allowed enterprises to create private air defense groups, but tax legislation fails to provide clear benefits. Lawyer Kseniia Mezhova explains why businesses protecting the country at their own expense face uncertainty regarding VAT and tax credits.

Kharkiv Mayor Ihor Terekhov presented a package of proposals for the 2027 state budget worth 75 billion UAH at a meeting of the Association of Frontline Communities: shelters, energy, water, and guarantees for residents.

Kharkiv mayor Ihor Terekhov proposed cutting VAT on basic food and medicines from 20% to 5% instead of raising the rate, but conditional on controlling retailer markups and protecting individual entrepreneurs (FOP).

Ukraine's Ministry of Economy proposes raising VAT by 1 p.p. to 21% to create a state fund compensating business losses from shelling. The special fund will begin operating in 2027.

Ukraine's Economy Minister Oleksandr Kravchenko stated that the Cabinet of Ministers is considering raising VAT to create a $2–3 billion insurance fund. No final decision has been made, but the option is regarded as the most realistic for quickly mobilizing funds.

VARES and Pro-Consulting presented the first comprehensive study of the vape market in Ukraine: the average user age is 30, 82% prefer reusable devices, and 70% buy liquid in offline stores. According to the association’s calculations, legalization could bring 4 billion UAH to the budget in the first year.

The Verovna Rada committee has recommended for the third time the adoption of a bill to scrap the VAT exemption on international parcels under €150. The reform could bring the budget around UAH 10 billion annually and will not take effect before January 1, 2027.

The head of the Verkhovna Rada Finance Committee, Danylo Hetmanets, explained that the impossibility of introducing general tax holidays is due to the need to finance the army, but confirmed the existence of assistance mechanisms for those affected by shelling.