Parliament Backs 50% Tax on 2027 Profits Despite Pushback

On Tuesday, Ukraine’s parliament voted to raise the corporate income tax on bank profits from 25% to 50% in 2027, pressing ahead despite objections from the central bank – the National Bank of Ukraine (NBU) – and the banking industry. A total of 265 lawmakers backed bill No. 15262 in the first reading, 39 votes more than the 226 required.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. Lawmakers have turned to the bank profits levy for the fourth time since 2023, with the central bank opposing earlier rounds, warning that the tax is starting to eat into the capital that fuels lending. However, Tuesday’s vote was only the first reading. Lawmakers must now make amendments to the bill and vote on it again in the second reading, which can then be passed down to the president for approval. “This is the fourth time we have made such a decision, and the previous three were quite successful, because we managed to attract additional funds to the budget from the banking system, which receives super profits even during wartime,” Interfax-Ukraine quoted Danylo Hetmantsev, co-author of the bill, chair of parliament’s tax committee, and a lawmaker from the Servant of the People Party. This is the fourth time we have made 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 receives superprofits even during wartime Other Topics of Interest Zelensky: Ukraine’s Data Center Strikes ‘Hurt Russia More’ Zelensky says decentralized networks help Ukraine withstand Russian data center strikes, while Moscow’s centralized systems are more vulnerable. The vote moves forward despite the NBU previously warning that it comes at the cost of lending, which independent economists see as an easier route than reforms which remain stalled in parliament. The draft 2027 state budget already counts Hr.38.5 billion ($845 million) in additional revenue from keeping the 50% rate, according to Hetmantsev. The sum compares with the NBU’s estimate of Hr.20 billion ($439 million) that banks will pay in windfall tax in 2026. High profits and opposition Lawmakers first imposed a 50% tax on banks’ 2023 profits in a law passed in November 2023 – applied retroactively, in breach of Ukraine’s tax code, which requires at least six months’ notice – and set a permanent 25% rate for 2024 onward, while also setting a permanent 25% rate from 2024. Neither banks nor the NBU pushed back, as lending was subdued and banks earned record profits largely from government securities. “We could clearly see that the banks were generating tax revenue and weren’t really using it,” First Deputy Governor Serhiy Nikolaichuk told Kyiv Post at the June 30 briefing. The 50% rate returned for 2024 despite the IMF recommending against it, and again for 2026. Banks paid Hr.95.9 billion ($2 billion) at the 50% rate in 2024, roughly a third of all corporate income tax collected that year, according to Kyiv Post in July. Data provided and calculated by the National Bank of Ukraine, based on data from the State Treasury of Ukraine and bank data. “The NBU was postponing the implementation of bank capitalization plans, all to spread the impact of this tax and avoid hindering the resumption of lending,” Pervin Dadashova, director of the Financial Stability Department, told Kyiv Post during the June briefing. The NBU has since raised the alarm that paying the tax more than twice is no longer a war-related excuse, but an unsustainable policy. NBU Governor Andriy Pyshnyi described the central bank as “categorically opposed” to the levy at a June 18 briefing. “The Ukrainian economy needs a banking system that can sustain it, meaning that the banking system, which is ten times smaller in terms of capital than that of neighboring Poland, must grow. If levied permanently, the extra tax would eliminate room for such growth,” the NBU wrote in an official statement condemning the bill. Loans to businesses rose 30% year-on-year in 2025 and loans to households about 36%, according to NBU estimates. Comparatively, banks’ capital adequacy ratio has declined from 17.3% to 16.4%. However, independent economists did not rush to defend them. Concorde Capital estimated their return on equity at 29.9% in 2025, against an EU average of 9.4% in 2024, according to Oleksandr Parashchiy, head of the company’s analytical department, who shared the estimates with Kyiv Post. (Graph by Olena Hrazhdan based on Concorde Capital’s Head of the analytical department Oleksandr Parashchiy’s estimates) Olena Hrazhdan is the Business Reporter at Kyiv Post, covering Ukraine’s markets, business, and economic policy. While she reports broadly on economic issues, her core focus is banking, finance, monetary and fiscal policy. Olena previously wrote for leading Ukrainian business media and became a Fellow of the International Monetary Fund’s Journalism Fellowship in 2024.