A 50% tax on bank profits could slow Ukraine’s recovery, says banker
8 July 21:11
YOUTUBE
The decision to continue taxing bank profits at a rate of 50% could have long-term consequences for lending to the economy and financing the country’s reconstruction. Maksym Tsymbal, first deputy chairman of the board of Pivdenny Bank, spoke about this in an interview with the YouTube channel "Komersant Ukrainian".
According to him, increased taxation of the banking sector reduces the amount of capital that banks can allocate to issuing new loans.
“The banking system will be taxed at a rate of 50% for the fourth year in a row. If everyone else pays 18% and banks pay 50%, then this resource is effectively being taken out of their capital. And banks cannot lend when they lack sufficient capital,” Tsymbal explained.
According to the banker’s assessment, the Ukrainian banking system could potentially meet up to 15–20% of the annual funding needs for the country’s reconstruction. However, he noted that under the current approach, this resource could be quickly depleted.
“My personal assessment is that this 15–20% may be the maximum the capital can sustain for one or two years. After that, the pace of lending will begin to slow down,” he noted.
At the same time, Tsymbal acknowledged that, in the short term, higher taxation allows the government to fill the budget more quickly; however, strategically, this approach could hinder economic recovery.
“Right now, everyone is looking for ways to fill the budget, and it seems logical to take these funds from the banks. But in the long term, this could turn out to be a losing proposition,” the banker concluded.
In his view, the remaining funding needs for reconstruction should be covered by international financial organizations, the development of the stock market, corporate bonds, and foreign direct investment.
As a reminder, in 2023, Ukraine introduced an increased emergency corporate income tax rate of 50% for banks, which was then positioned as a temporary mechanism for taxing the banking sector’s windfall profits amid the war. At the same time, this approach may now effectively become a long-term one.
On May 20, 2026, a bill No. 15262 was registered in the Verkhovna Rada, which provides for maintaining the corporate income tax rate for banks at 50% in 2026–2027 by amending paragraph 73 of subsection 4 of Section XX “Transitional Provisions” of the Tax Code of Ukraine.
In addition, the bill proposes temporarily depriving banks of the right to offset losses from previous years to reduce their tax base. Specifically, in 2026–2027, banks will not be able to apply the relevant provision of the Tax Code regarding the carryover of a net loss. Losses incurred during this period may be taken into account only beginning January 1, 2028.
