Parliament supported additional taxation of banks

Oleksandra Opanasenko

The Verkhovna Rada (the Ukrainian Parliament) adopted in the second reading draft law No. 9656d on additional taxation of banks. 229 MPs voted for it.

This was reported by the head of the tax committee Danylo Hetmantsev.

The initial concept of the draft law has undergone changes. From now on, the tax rate on banksʼ surplus profits based on the results of 2023 will be 50%. Starting from 2024, the basic income tax rate for banks will be 25%.

Why is this important?

According to the National Bank, solvent banks of Ukraine in January-September 2023 received a record net profit in the amount of 110 billion hryvnias. Last year, for the same period, banks earned only 7.37 billion hryvnias.

Additional taxation has been repeatedly used in the world, when one industry received excess profits not due to additional investments or expansion of production, but due to certain temporary economic conditions, the so-called economic rent. Additional taxes should balance this situation.

The law on taxation of excess profits of banks will provide additional revenues to the budget to finance military expenses. The calculations of the Ministry of Finance show that the tax increase will bring 24-25 billion hryvnias for 2023, and then it will decrease to 6-7 billion hryvnias.

Earlier, the head of "monobank" Oleh Horohovsky claimed that bank clients will suffer from the tax on surplus profits. To maintain the current level of profits, banks will increase interest rates on loans and reduce interest rates on deposits.