In 2025, Ukraine will need to significantly increase defense spending, and as emphasized by MP Olga Vasilievska-Smaglyuk, without raising taxes, such resources cannot be found. Despite the adoption of a bill to increase tax revenues, it has not yet been signed by President Volodymyr Zelensky, which threatens the financial support of the Ukrainian army.
Budget 2025: Defense a Priority, but Where to Find the Money?
The state budget for the year 2025, approved by the Verkhovna Rada, allocates 120 billion hryvnias for financing the Armed Forces of Ukraine. However, as Vasilievska-Smaglyuk points out, in order to raise such funds, taxes need to be increased. The budget is not balanced, and without additional financial contributions, it will not be able to fully support the country’s defense capabilities.
The changes proposed in the budget bill relate not only to increasing defense spending, but also to covering the deficit through tax revenues. According to Vasilievska-Smaglyuk, the bill to raise taxes was approved by the Rada on October 10, but has not yet been signed by the president. Without this signature, the government machinery cannot effectively implement the increase in revenues, hindering the funding of military needs.
Plans for 2025: 56% of Budget Allocated to Defense
The defense of Ukraine will remain the top budget priority for the next year. As in previous years, the main financial resources will be directed towards the army and national security. According to the plan, 56% of the budget is intended to finance the army, armaments, and other military needs.
Despite financial difficulties, the government of Ukraine insists on ensuring the security of the country as the main goal. However, the funding situation remains challenging. With increasing defense expenditures, the government will have to decide where to find funds for other important social and economic programs that also require significant resources.
Tax Burden Will Increase: What Changes to Expect for Ukrainians?
One of the innovations will be an increase in the military levy, which will rise from 1.5% to 5% for certain categories of taxpayers. The government’s intention with this levy increase is to help cover part of the defense costs. Some economists point out that such an increase in the tax burden on citizens may lead to criticism from the population. However, in the conditions of war and constant threat, this is a necessary measure.
It is also worth noting that increasing taxes amid economic instability may impact the development of businesses, especially small and medium-sized ones. Many entrepreneurs are already facing difficulties in the conditions of war, and additional fees may further complicate their operations.
Challenges for the Budget: Will There Be Enough Money for Other Sectors?
In addition to the army, Ukraine also needs significant investments in education, healthcare, social programs, and infrastructure restoration. Therefore, the question of ensuring all spheres of life remains relevant, especially in conditions of limited resources. Increasing taxes may help cover defense expenses, but it also means that the government will have to find additional ways to finance other programs.
It is important to remember that Ukraine currently faces a significant budget deficit due to the war and economic hardships caused by the destruction of infrastructure, labor market losses, and decreased industrial production. Therefore, the issue of increasing taxes to meet the army’s needs is just one step towards stabilizing the country’s financial situation.
Will There Be Public Support?
Introducing new taxes is always a challenging step for the government, especially in times of war. Society expects transparency and fairness from the government in the use of budget funds. Ukrainians are willing to support army financing, but only under the condition that the funds will be spent efficiently and in the country’s interests.
