Hetmantsev rules out tax hikes through 2026 amid budget deficit concerns
Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy, sees no prospects for tax increases—even in 2026. He made this statement during a national telethon broadcast on the evening of Monday, June 2.
The 2025 state budget faces a shortfall of up to half a trillion hryvnias, but Hetmantsev remains confident that this gap can be closed without raising taxes.
"From my point of view, I see no grounds for increasing taxes—not even in 2026. The outlook for 2026 is especially concerning in terms of state revenue, as the projected deficit is even larger and has not yet been covered by external sources," Hetmantsev said.
He identified economic de-shadowing (bringing grey economy operations into the legal framework) as the primary mechanism for boosting budget revenues. According to Hetmantsev, de-shadowing generated an additional $1.5 billion in 2022, $2.5 billion in 2023, and is projected to yield $4 billion in 2024.
"This year, we expect to raise 160–170 billion UAH through de-shadowing by the end of the year," he specified.
Additional funding sources include military bonds and fiscal optimization measures, such as cutting inefficient budget programs, which could release up to 50 billion hryvnias, he added.
Hetmantsev stressed that raising taxes without first addressing the shadow economy would unfairly burden compliant businesses:
"If you increase taxes today without tackling the shadow economy, those taxes will fall on law-abiding businesses, placing them at a disadvantage compared to businesses operating in the shadows," he explained.
Hetmantsev estimated the size of Ukraine’s shadow economy at 800–900 billion hryvnias.
"If we could recover these funds and redirect them to the state budget, we could triple teachers' salaries, triple doctors' wages, and raise pensions by 50%," he noted.
Among the key de-shadowing measures, he highlighted combating illicit trade in tobacco and fuel, and reforming the customs service to curb smuggling. Hetmantsev also urged citizens to play a role:
"If you don’t demand a receipt, you’re essentially helping fraudsters steal money from the army," he said.
- In early May, Forbes Ukraine, citing informed sources, reported that Ukraine and the IMF were discussing raising the VAT rate and reintroducing progressive personal income taxation in 2026.
