AUB News

Raising the income tax on banks to 50% is one of the most controversial fiscal initiatives currently being discussed in the Verkhovna Rada. The business community and the financial sector warn that such a decision may not only violate constitutional norms, but also create long-term risks for the economy, the investment climate, and access to credit for Ukrainians. Why is a targeted increase in tax pressure on the banking sector dangerous, what consequences could the “super tax” have for public finances, lending, and the privatization of banks, and what should a fair tax policy look like in wartime? Read about this in an interview with Andriy Dubas, president of the Association of Ukrainian Banks.

This is an adapted text version of the radio broadcasts of the KYIV MORNING SHOW on Radio Kyiv – 98 FM with the participation of Andriy Dubas, President of the Association of Ukrainian Banks. The conversations have been shortened and edited for clarity.

— Mr. Andriy, draft law No. 14097 on raising the tax rate for banks to 50% has caused quite a stir. What is the main problem with it?
— Ukraine has a Tax Code that establishes taxation rules for citizens and businesses. These rules must not contradict the Constitution of Ukraine. The Constitution clearly states that changes to tax legislation must be made at least six months before their introduction. This is necessary so that businesses can prepare and plan their activities.

Bill No. 14097, initiated by Danylo Getmantsev together with other deputies, provides for the establishment of an increased income tax for banking institutions at the level of 50% of their financial results. In simple terms, if a bank earns 100,000 hryvnia in a calendar year, it will have to pay 50,000 hryvnia to the state in accordance with this legislation. And they plan to adopt this at the end of the year, without complying with the constitutional requirement of advance notice.

— So, it's not just about the rate, but also how it's implemented?
— Absolutely. In 2023, and then again in 2024, the tax on banks was already increased — and at the time, this was explained by extraordinary circumstances. We understood the situation with the US Congress's delay in supporting Ukraine, and at that time, the market was understanding. But then it was clearly stated that this would be a one-time thing and that there would be no return to such measures. Today, we are seeing a repeat, and this is already the third such initiative proposed for 2026.

— The initiators of the bill argue that this is necessary to fill the budget during wartime. Why do you think this approach is wrong and risky?
— There are two aspects here. The first is discrimination against one sector of the economy. Today, all enterprises pay 18% income tax. For banks, the rate was first raised to 25%, and now they are proposing 50%. If the state believes that taxes should be raised in wartime, that is understandable. But then it must be done equally for everyone. Otherwise, society and business will objectively perceive it as unfair.

The second aspect is efficiency. If the state takes one hryvnia from banks' profits in the form of tax, that is one hryvnia in the budget. If this hryvnia remains in the banks' capital and works through lending, it gives the economy an effect of up to 10 hryvnias. In other words, instead of economic development, we get a one-off “patch” for the budget.

— What is the current lending trend? There is data suggesting that banks are not lending enough to businesses.
— This is one of the key myths that needs to be debunked with figures. And figures are stubborn things. Over the last 12 months, the loan portfolio of Ukraine's banking system has grown by almost UAH 200 billion:

it was UAH 785 billion as of September 1, 2024,
and it became UAH 984 billion as of September 1, 2025.
This means that banks are actively lending to the economy. And it is this trend that needs to be strengthened, not stopped.

— In addition to the impact on lending, there is another important aspect — the investment attractiveness and privatization of banks. How will the “super tax” affect these processes?
— When the rate for one sector is raised to 50%, while for the rest of the economy it remains at 18%, this creates the risk of selective rules. For investors, this is a signal that the rules can change at any moment. This reduces interest in investing in Ukrainian assets, particularly in the banking sector, where the state is planning privatization. Selling banks to investors in conditions of unpredictable tax policy is practically impossible. First, there must be trust and stability in the rules.

— To put it bluntly: why have banks become the target of such targeted fiscal pressure? It seems selective.
— The banking sector is the most transparent segment of the economy. All reporting is open, regulated by the NBU, and easy to analyze. Therefore, it seems that “it is easier to take from here.” But this approach is short-sighted. Banks are the lifeblood of the economy. When half of their profits are taken away, their capital decreases, and so do their opportunities to lend to businesses and citizens. This is not a blow to banks, but to the economy and people's well-being.

— How will this decision affect ordinary Ukrainians, who may not see the connection between the tax on banks and their wallets?
— At first glance, the average Ukrainian will not feel the difference — their salary will be deposited into their card, and their utility bills will be paid. But the consequences will become apparent in a few months — in slower economic development, a lack of new jobs, and more difficult access to credit. Businesses will not be able to expand, invest in equipment, create jobs, or raise salaries. In other words, the price of this “budget patch” is a slowdown in the country's economic growth.

— What would be a fair tax policy model during wartime that would support the budget without stalling the economy?
— If the state decides to raise taxes during wartime, this may be a justified step. But the increase must be fair and uniform for all sectors of the economy. If, for example, the income tax were raised from 18% to 25% for all enterprises, it would be perceived as fair and understandable. But when one segment is singled out, it creates a sense of selectivity.

— And finally, what is the main message that the Association of Ukrainian Banks is sending to members of parliament today?
— We are consistent: predictability and stability of rules are the foundation of the financial system and economic development. Members of parliament must remember that they are elected by citizens and are obliged to abide by the Constitution. Decisions must be made that do not undermine the country's financial stability. Today, the banking system is stable, transparent, and fulfilling its role. Careless decisions can undermine this, and everyone will suffer: business, the economy, and citizens.