No VAT increase, but money for business insurance lacking - Hetmantsev

Head of the parliamentary committee on finance, tax and customs policy Danylo Hetmantsev stated that there will be no increase in VAT or other taxes to finance business insurance against war risks. At the same time, there are currently no funds to implement the new mechanism to support enterprises.

The deputy said this on October 19 on his Facebook page following a meeting with Prime Minister Serhiy Koretskyy and representatives of large businesses.

"And no, there are no chances of raising VAT or any other taxes - no", - stated Hetmantsev.

According to him, the meeting participants discussed possible options for government assistance to enterprises amid a severe shortage of budget resources.

Hetmantsev noted that the Minister of Economy and Environment Oleksandr Kravchenko developed a war risk insurance mechanism, which he evaluates positively. However, the main obstacle remains the lack of necessary financing.

"The question is the resource for its implementation, which, unfortunately, is currently not available. But this does not mean we should abandon the search for solutions to support business," - emphasized the deputy.

One possible source of additional resources, according to Hetmantsev, is savings in military procurement. He said that during the meeting, representatives of large businesses drew attention to the need for more efficient use of funds in this area.

The committee head agreed with this position and stated that he has been demanding the streamlining of military procurement from the government since 2022. He expressed hope that Prime Minister Serhiy Koretskyy will address this issue.

However, the deputy did not name specific amounts that could be saved and directed to support enterprises.

Another problem for business, according to Hetmantsev, is the insufficient availability of bank lending. He criticized the policy of the National Bank in this area, describing the situation as catastrophic.

According to the deputy's assessment, the regulator does not pay adequate attention to the difficulties of enterprises in obtaining financing. At the same time, no concrete new decisions regarding lending were announced following the meeting.

Earlier, the Cabinet of Ministers considered raising the standard VAT rate from 20% to 21% as one of the sources of financing war risk insurance.

As reported by "Kurs Ukrainy" on September 28, Prime Minister Serhiy Koretskyy explained the need for such a step by the need to form a special fund to compensate losses to enterprises that suffered from Russian attacks.

According to the preliminary plan, Ukraine's contribution to the fund was to exceed $1 billion. Additionally, the government expected to attract about $4 billion from international partners.

The new mechanism envisaged using the existing insurance infrastructure so that enterprises could receive compensation faster after confirmation of destruction.

However, after consultations with business representatives, Hetmantsev categorically rejected the possibility of raising taxes to finance the relevant program.

At the same time, his statement does not yet mean an official revision of the draft state budget for 2027. The Cabinet of Ministers has not announced a new source of funding for the large-scale war risk insurance mechanism or a final decision on the previously proposed VAT increase.

Thus, the issue of state support for enterprises suffering losses from Russian shelling remains open. Further decisions will depend on whether the government and parliament can find the necessary resources without increasing the tax burden.

Based on materials from: Danylo Hetmantsev