Tax hikes or EU money: how to finance the Budget 2026
15 September 2025 11:37
Ukraine’s Finance Minister Sergiy Marchenko said that Ukraine will need even more money from its international partners next year than this year because the war is dragging on. To cover the budget deficit, he is counting on 16 billion euros from European partners. The minister said this while speaking at the YES conference in Kyiv, "Komersant Ukrainian" reports citing Interfax-Ukraine.
“We need more money than this year. There was more this year (than last year). We have not yet seen the final stage of this war, so we need to prepare. I need to cover EUR 16 billion for the next year,”
– the Minister said.
Regarding the idea of European Commission President Ursula von der Leyen to give Ukraine a loan secured by frozen Russian money, the minister ironically praised the Europeans for their ingenuity:
“They are able to prepare various mechanisms that help us use frozen (Russian) assets without real confiscation.”
Marchenko supported such attempts, but noted that discussions about a specific method are still ongoing.
Earlier in August, the minister said that Ukraine lacks $37 billion for 2026-2027. For 2026, 45 billion is needed, part of which is planned to be covered by the money left over from this year’s international aid.
However, today Forbes Ukraine wrote that in 2026 Ukraine will face a budget deficit of “at least $10 billion,” not 16 billion euros, as Marchenko claims. The publication claims that the IMF traditionally demands tax increases in this situation, but the government will try to avoid this by attracting European funds.
Danylo Hetmantsev, chairman of the Verkhovna Rada’s tax committee, also mentioned the same amount.
“The Cabinet of Ministers estimates the need for 2026 at 45 billion. According to the Ministry of Finance, 35 billion will be closed, taking into account the transitional balances. In other words, while $10 billion is not enough for the next year… we have a $10 billion hole for the next year,”
– he said in an interview with RBC-Ukraine.
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Will taxes be raised?
Hetmantsev claims that there will be no major tax hikes, but there will be “point decisions,” such as another taxation of online platforms:
“There will be some point decisions like the implementation of DAC7. This is an EU directive that concerns the cooperation of the taxation mechanism for digital platforms like Uber and Glovo. It is about improving the collection of taxes on activities carried out through digital platforms. The government has already introduced a corresponding bill.”
In addition, the MP added that “the IMF is also talking about taxing parcels,” but there is no idea of a global VAT rate increase on the table at the moment. The MP has recently realized that raising taxation is not very constructive when a significant part of the economy is in the shadows.
“Talks about taxation should or even can be raised only after we have fundamentally resolved the issue of the shadow economy. I’m not talking about complete eradication, but about transferring it to a different scale. If we estimate that there are 900 billion hryvnias in the shadow, and I think next year it will be 1 trillion – and this is not turnover, but only underpaid taxes – then this is a matter of the quality of administration,”
– mr. Hetmantsev is sure.
For more details on whether the budget will be balanced next year with European funds, read Money for the Budget: Will the Ukrainian authorities manage to avoid tax increases?
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