President Volodymyr Zelensky signed the law on additional taxation of banks.
This is stated in the draft law card No. 9656d.
Now, the tax rate on banksʼ surplus profits will be 50% based on the results of 2023. Starting from 2024, the basic income tax rate for banks will be 25%.
Why is this important?
Adoption of this law is one of the requirements of the International Monetary Fund (IMF), from which the government of Ukraine expects $5.4 billion in tranches in 2024. Earlier, the Fund supplemented the Extended Fund Facility (EFF) for Ukraine with four beacons: on the Budget Code, the "5-7-9%" lending program, the State Tax and Customs Service, and the GTS Operator.
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.
According to the National Bank, solvent banks of Ukraine for the period from January to September 2023 received a record net profit 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.
Earlier, the head of “monobank” Oleh Horohovskyi 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.