In wartime, the government is obliged to ensure budget revenues. Therefore, if there is additional cost pressure, taxes on excess profits of enterprises may become one of the sources of state budget revenues. This is stated in the memorandum on financial and economic policy published on the IMF website, UNN reports.
"In order to eliminate negative effects on taxpayer behavior and increase the stability of the private sector, principles of taxation of excess corporate profits will be discussed, including guidance on extraordinary circumstances in which such taxes may be applied" - the document says.
Details
As noted in the memorandum, as a starting point for the 2024 budget, the authorities introduced a one-time increase in the bank profit tax from 18 to 50 percent in 2023. Then the tax will be 25% in the following years.
Further, to help create buffers, the Ministry of Finance is to set up a working group by the end of February 2024 to formulate a proposal with a package of short-term tax and non-tax measures that will generate additional revenues of at least 0.5 percent of GDP. These measures could be activated in 2024 if additional spending pressures arise.
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