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In Search of Intersections: How State Tax Plans and Business Reality Coexist

by Roman Cheplyk
Thursday, September 25, 2025
3 MIN
In Search of Intersections: How State Tax Plans and Business Reality Coexist

Ukraine’s National Revenue Strategy sets ambitious reforms until 2030 — but business voices warn of unpredictability, shadow markets and excessive burdens

State Tax Plans: The National Revenue Strategy 2024–2030

Back in December 2023, the government approved the National Revenue Strategy of Ukraine — a roadmap for tax reform until 2030. The aim is integration into the EU, budget stability and modernization of tax administration.

Key directions of reform include:

  • Simplified taxation system

    • abolition of simplified taxation for legal entities,

    • higher rates for FOPs,

    • mandatory RRO for all simplified taxpayers,

    • VAT registration upon threshold exceedance,

    • proof of goods’ origin.

  • Personal income tax (PIT)

    • progressive scale for higher incomes,

    • replacement of non-taxable minimum with targeted social aid,

    • stricter oversight of disguised employment,

    • tax authorities’ access to bank account flows.

  • Corporate taxation and incentives

    • revision of investment tax regimes,

    • adoption of EU rules for royalty taxation.

  • Harmonization with EU law

    • raising excise duties on fuel, alcohol, tobacco to EU minimum levels,

    • modernizing property tax,

    • higher environmental tax after the war.

  • Digitalization and anti-corruption

    • new e-audit, SAF-T UA reporting,

    • HelpDesk for customs,

    • stronger internal security units in customs and tax.

Projected effect: +27% GDP revenues by 2030.


Business Reality: Sector Insights

Tobacco industry

Executives from Imperial Tobacco, BAT, Philip Morris and JTI agree on two priorities:

  • predictable excise policy,

  • effective fight against the 15–16% shadow market.

Sharp tax hikes (+44% in 2025, +16–26% expected in 2026) drive consumers to illegal products, costing the budget 25–30 billion UAH annually. Businesses call for:

  • stronger BEB capacity,

  • coordination between Tax Service, Police and Customs,

  • strict liability for illicit trade,

  • timely implementation of eExcise by 2026.

Metallurgy

Ferrexpo warns that VAT refund suspensions cut its business to a quarter of capacity, reducing socio-economic contribution by $180m in 2025 and up to $240m in 2026.

Food & catering

McDonald’s Ukraine doubled tax payments in 2024 (to UAH 2.6 bn) with 103m visitors. They stress:

  • simplified EU-style reporting could bring SMEs out of the shadows,

  • fair competition and regulatory stability are key for growth.

Fozzy Group points to “gray zones” — salaries in envelopes, fiscal evasion, counterfeit imports — that distort the retail market.

Medical services

Sinevo and DILA forecast +10–15% growth in 2026, provided stability holds. Concerns include:

  • excessive payroll tax pushing wages into envelopes,

  • VAT and smuggling evasion,

  • non-transparent criteria for the “white business club”.

They support digital audit tools (E-audit, SAF-T UA) but warn they must be technically finalized before launch.

Beverage producers

Carlsberg and IDS Ukraine highlight balanced EU-style regulation, softer beer advertising rules, and a differentiated excise approach. Carlsberg alone paid UAH 3.4 bn in 2024, leading its sector.

Banks

FUIB and Raiffeisen emphasize:

  • record defense spending → budget deficit > UAH 2 tn,

  • risk of over-taxation (50% rate for banks vs 25%),

  • unclear donor funding volumes,

  • criteria of the “White Book” list not reflecting sector specifics.

Ride-hailing and IT

Uklon reports UAH 494m taxes in H1 2025, expects further growth, and backs draft law No. 14025 on automatic tax information exchange for digital platforms — projected to add +10 bn UAH to the budget.


The Intersection Point

  • State strategy: EU harmonization, digitalization, higher excises, tighter PIT/CIT rules.

  • Business reality: needs stability, fair enforcement, and shadow market elimination.

Both sides agree: predictability + effective fight against illegals = stronger revenue and better conditions for investment.


Bottom line: Ukraine’s tax reform is ambitious, but unless enforcement shifts focus from compliant businesses to illegal markets, the risk remains that planned revenues will bypass the budget — into the shadows.

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