Ukraine Proposes Wartime Tax Hike to Fund Defense Amid Ongoing Conflict

The Ukrainian government has proposed its first wartime tax hike to raise billions for defense spending. This initiative aims to increase military spending by 495.3 billion hryvnias ($11.9 billion) to fund the ongoing war against Russia. Parliament and President Zelenskiy must approve these changes for them to take effect.

In a significant move to bolster its military budget, Ukraine's government proposed its first wartime tax hike on Thursday. This initiative aims to generate billions of dollars for weaponry and military salaries as the war with Russia extends into its 29th month. The government approved draft changes to its 2024 budget law, notably increasing defense spending by 495.3 billion hryvnias ($11.9 billion).

Until now, Ukraine targeted defense spending of around 1.7 trillion hryvnias for 2024. The proposed changes require parliament's endorsement and President Volodymyr Zelenskiy's signature to become law. The government proposed various tax hikes and additional duties on imports, including a war tax increase for residents and higher excise duties for fuel.

"The full-scale war is now in its third year, and the needs in the security and defense sector are growing," stated the finance ministry. To meet these needs, the ministry emphasized the reliance on domestic resources. The proposed changes represent the most manageable option for financing additional military requirements, covering only about a third through tax hikes, officials noted.

(With inputs from agencies.)