The National Bank of Ukraine (NBU)

In Nov. 5 statements issued by the National Bank of Ukraine (NBU) and the Finance Ministry (both are represented on the council), the analysis said imposing another tax hike on banks would:

• Curtail banks’ credit and investment capacity, undermining funding for critical industries such as energy and defense;
• Complicate the planned privatization of state-owned banks and jeopardize their required capitalization under resilience assessments;
• Weaken banks’ ability to maintain stability in wartime conditions and to combat unproductive capital outflows;
• Make it harder to meet European Union capitalization benchmarks;
• Breach commitments in the IMF Memorandum on Economic and Financial Policies;
• Incentivize tax evasion.

On Oct. 21, a bill that would hike the tax on bank profits from the current 25 percent to 50 percent passed its first reading the Ukrainian parliament (Verkhovna Rada). The bill’s principal sponsor and co-author is Danylo Hetmantsev, chair of the parliamentary Finance Committee. The business community has urged lawmakers to reject the measure in its second reading, and NBU Governor Andriy Pyshnyy has publicly called the proposal “dangerous.”

Read also: NBU cuts Ukraine’s 2025 GDP forecast to 1.9% amid energy and labor shortages

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Read the original article on The New Voice of Ukraine

Section: Nation

Author: Eric Malinowski