VAT is planned to be increased by 1%: Prime Minister Koretskyi named one of the reasons
The planned increase of value added tax by 1 percentage point should become one of the sources of financing a new mechanism of insuring Ukrainian business against war risks. The government plans to independently contribute over $1 billion to a special fund, and then attract about $4 billion more from international partners.
Prime Minister Serhiy Koretskyi said this in an interview with the program "TSN.Week".
According to Koretskyi, constant Russian strikes on enterprises, warehouses, logistics and other commercial infrastructure harm not only specific companies but also public finances: destroyed businesses lose the ability to produce products, pay salaries and taxes.
That is why the Cabinet of Ministers wants to create a separate financial reserve from which enterprises will be able to quickly receive compensation after Russian attacks. Ukraine's initial contribution should amount to slightly more than $1 billion.
"The state budget includes some unpopular decision - including a small tax increase. VAT. Unfortunately, there are no other sources" , - Koretskyi said.
This concerns the increase of VAT by 1 percentage point, which the government included in the calculations of the draft state budget for 2027. The budget itself has not yet been approved by the Verkhovna Rada, and Koretskyi noted that the Cabinet will continue consultations with deputies and business.
The government expects that Ukraine's own contribution will become the basis for attracting significantly larger resources from allies. According to the prime minister, partners will be offered to increase the Ukrainian contribution fourfold - to provide another $4 billion. Thus, the total volume of the fund may reach about $5 billion.
"I believe that it is a partnership when the state, when the government makes its contribution and shows that despite everything we are fighting" , - said the prime minister.
Koretskyi stated that international partners support the very idea of such a mechanism. Earlier, the government officially reported that in the draft budget for 2027 it plans to allocate more than $1 billion to the War Risk Insurance Fund.
According to the government's plan, the new model should work through already existing insurance companies. They will not have to fully reinsure war risks abroad: a fund created with state participation will take a significant part of the risk upon itself. This, according to the Cabinet's calculations, should make insurance policies more accessible for enterprises.
A separate goal is to minimize the time between the destruction of an enterprise and receiving money. Koretskyi noted that the current classical insurance of war risks is expensive, and the settlement of large insurance cases with the participation of international insurers can drag on even for years.
In the new system, after recording the consequences of an attack by the State Emergency Service and other responsible bodies, verification of the amount of damages should be carried out, after which compensation is planned to be paid as quickly as possible. This should give companies the resource to restore production, pay salaries, and continue work.
Certain mechanisms of insurance and compensation of war risks are already operating in Ukraine. On September 17, the government expanded the current program, in particular, increased the maximum compensation of the insurance premium from UAH 3 million to UAH 5 million per year for one enterprise, and extended support to additional types of property. The new multibillion-dollar fund should become a significantly larger mechanism for covering business losses from Russian attacks.
Based on materials: "TSN.Week", Cabinet of Ministers of Ukraine
