Ukraine Finance Ministry Unveils Major Tax Reform Bill Targeting Digital Platforms, Entrepreneurs, and Post-War Military Levies

The Finance Ministry’s new tax bill proposes VAT for entrepreneurs, digital platform taxation, and extending the military levy to raise UAH 60 billion annually.

By: AXL Media

Published: Mar 20, 2026, 11:53 AM EDT

Source: Information for this report was sourced from Finance Ministry

Fiscal Alignment with International Monetary Fund Mandates

The Ukrainian Finance Ministry has moved to fulfill critical obligations under the $8.1 billion Extended Fund Facility (EFF) program by introducing a sweeping legislative tax package. This bill, which must be adopted by the end of March 2026, aims to stabilize the national budget and prevent a catastrophic drop in revenue once martial law is eventually lifted. According to the ministry's explanatory note, the proposed changes are expected to secure approximately UAH 60 billion in additional state revenue annually. This move signals Kyiv's commitment to deep structural reforms even as the nation remains under the immense financial pressure of active defense.

Mandatory VAT Registration and Relief Measures for Entrepreneurs

A cornerstone of the new legislation is the mandatory registration for Value-Added Tax (VAT) for entrepreneurs operating under the simplified taxation system. Specifically, those with annual revenues exceeding UAH 4 million must comply with the new registration requirements by January 1, 2027. To ease this transition, the Finance Ministry has proposed several relief measures, including a shift to quarterly tax reporting for single-tax payers. Additionally, the bill suggests a symbolic penalty of only UAH 1 for the first five administrative violations during the 2027 transition year, allowing small businesses time to adjust to the more rigorous accounting standards of the Unified Register of Tax Invoices.

Redefining the Future of the Military Levy

The bill proposes a significant structural change to the military levy, which was previously tied strictly to the duration of martial law. The new text suggests that the levy will now persist until the Verkhovna Rada officially confirms the completion of the Armed Forces of Ukraine reform. Under the new guidelines, single-tax payers in the first, second, and fourth groups will face a levy set at 10% of one minimum wage—estimated at UAH 850 in 2026. For those in the third group, including both individual entrepreneurs and legal entities, the levy is proposed at 1% of total income, ensuring a sustained domestic funding stream for military modernization.