Verkhovna Rada Plans 50% Profit Tax for Banks in 2026

The Committee of the Verkhovna Rada on Finance, Taxation, and Customs Policy has recommended that parliament approve draft law No. 14097, which proposes a significant increase in the tax burden on the banking sector in 2026. The document suggests temporarily setting the profit tax rate for banks at 50% and introducing restrictions on reducing the financial result before taxation by the amount of losses from previous years.

This is reported by AgroReview

Main Provisions of the Draft Law

The draft law, which is being prepared for its second reading, contains two main changes for the banking sector:

• Temporary increase of the corporate profit tax rate for banks to 50% for the year 2026.
• Prohibition on reducing the financial result before taxation by the amount of last year’s losses.

Possible Consequences for the Financial System

However, the relevant committee of the Verkhovna Rada has taken this step contrary to the previous position of the Council for Financial Stability, which includes representatives from the leadership of the National Bank and the Ministry of Finance. In their opinion, the fiscal effect of implementing such a rate will be significantly lower than expected, while the risks will be substantially higher.

“The fiscal effect of such a measure will be significantly lower than publicly communicated,” but the risks are much higher.

Among the main threats, experts cite the limitation of banks’ credit and investment potential, which is crucial for financing the energy sector and the defense industry. Complications in the privatization processes of state banks and violations of obligations under the memorandum with the International Monetary Fund are also possible. The National Bank warns that an increase in the profit tax may lead to the need for recapitalization of certain state banks.