Ukrainian Parliament adopts US$12 billion increase in defence spending

The Verkhovna Rada (Ukrainian Parliament) has adopted draft law no. 11417, which increases the 2024 budget by UAH 500 billion (roughly US$12 billion) for military needs.

Source: MP Yaroslav Zhelezniak

Details: The bill was supported by 298 MPs. 

Quote from Zhelezniak: "Thus, this year's expenditures amount to a record UAH 3.73 trillion (roughly US$89.23 billion) for Ukraine."

MPs voted in the first reading on 3 September for the bill to increase budget spending by UAH 500 billion (roughly US$12 billion).

Roksolana Pidlasa, Chair of the Budget Committee of the Verkhovna Rada, explained the sources of the additional UAH 500 billion (roughly US$12 billion) for defence:

• UAH 115.4 billion (roughly US$2.76 billion) – reduction of expenditures on servicing and repayment of the state debt;
• UAH 216 billion (roughly US$5.17 billion) – additional placement of domestic government debt bonds;
• UAH 100 billion (roughly US$2.39 billion) – over-fulfilment of the tax collection plan; 
• UAH 30 billion (roughly US$718.7 million) – tax revenues from tax increases;
• UAH 12.7 billion (roughly US$303.35 million) – increased excise tax rates on tobacco and fuel.

On 17 September, the Verkhovna Rada passed in the first reading draft law no. 11416d, which provides for tax increases, including:

• increasing the war tax from 1.5% to 5%;
• establishing a war tax rate of 1% of the income of single taxpayers of the third group;
• increase in taxes for Group 1 and 2 individual entrepreneurs;
• advance payments for petrol stations;
• setting the corporate income tax rate for banks at 50% for 2024;
• setting the corporate income tax rate for non-bank financial institutions (except for insurers) at 25%.
• These tax changes will bring UAH 58 billion (roughly US$1.39 billion) to the state budget in 2024 and UAH 137 billion (US$3.28 billion ) in 2025.

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