The Verkhovna Rada backed in the first reading bill No.15262, which extends the elevated corporate profit tax rate for banks at 50% into 2027, according to the press service of the Verkhovna Rada apparatus.
What the bill proposes
The bill extends into 2027 the application to banks of the elevated corporate profit tax rate of 50%. The draft also stipulates that banks will not be able to reduce their pre-tax financial result by losses from previous periods.
Bill No.15262 introducing amendments to the Tax Code concerning special features of bank taxation was submitted by MP Danilo Hetmantsev and other parliamentarians. The decision was adopted on Tuesday, 27 October.
“This is the fourth time we are adopting such a decision, and the previous three times were quite successful, because we managed to attract additional funds to the budget from the banking system, which earns excess profits even during the war,” Hetmantsev wrote on his Telegram channel.
Assessments and expected effect of the authors’ initiative
Hetmantsev noted that there is a significant volume of liquidity in the banking system which, in his view, is not being directed to lending the economy but is used for operations with government securities. He emphasised that the banking system should perform a socio-economic function and help channel funds into the economy.
“That is precisely why we have every reason to direct part of the banks’ excess profits to the needs of the armed forces. In 2027 alone this will provide an additional 38 billion UAH to the state budget,” Hetmantsev concluded.
Position of the National Bank of Ukraine (NBU)
The National Bank of Ukraine (NBU) stressed that the 50% tax was viewed by the banking sector in 2023 as a one-off forced measure due to the non-market nature of profits at that time. At the same time, the NBU warned of the risks of extending this practice for expanding lending and for banks’ ability to support the economy during the war and reconstruction.
The NBU also pointed out that only the banking sector continuously faces an elevated corporate profit tax rate of 25% (compared with 18% for the rest of the economy) and has effectively paid 50% twice already. According to the regulator, the sector carries the highest burden among all sectors of the economy — 0.68 hryvnia in receipts to the state budget per one hryvnia of value added.
