Draft Law Seeks to Extend Special Taxation on Bank Profits
A group of lawmakers led by Danylo Hetmantsev has registered a bill that would extend the 50% surtax on bank profits until 2027. The proposed changes to Ukraine’s Tax Code focus on the taxation framework for financial institutions. Andriy Pyshny, Governor of the National Bank of Ukraine, has voiced opposition to the move, warning it could heighten risks for economic lending.
Banking Sector Financial Performance
According to official data, the combined revenue of 60 Ukrainian banks in 2025 reached 579.3 billion UAH—up 14.2% from 2024 and 29.9% higher than in 2023. The additional bank levy was already in effect during 2023, 2024, and 2026, with return on equity recorded at:
- 59% in 2023
- 52% in 2024
- approximately 50% in 2025
Banks contributed 11% of all state budget revenues, including dividends from state-owned banks, and their share of gross domestic product stood at 2.9%.
Hetmantsev commented:
“During wartime, financing the security and defense sector is our unconditional priority number one.”He added that the extra taxation on banks had already proven effective in 2023, 2024, and 2026.
“That’s why we are acting proactively: to ensure predictability in tax policy, we are securing financial resources for the future right now,”Hetmantsev said.
Pyshny, however, expressed concern about the potential fallout from such changes, stating
“we cannot equate the situation in 2023 with today’s reality.”He noted that
“the return on equity of banks is already declining,”which he described as a natural return to a more market-driven sector. Pyshny also highlighted that state-owned banks generate half of the sector’s profits, meaning the government is effectively extracting resources from its own institutions that finance critical areas of the economy.
The expected revenue from extending the higher tax is about 20 billion UAH, but this could result in a potential loss of 200–300 billion UAH in lending capacity for the economy. The combined income of the leading banks in the Opendatabot Index for 2025 totaled 304.27 billion UAH, with the top ten banks accounting for 80% of all income across the 60 Ukrainian banks.
PrivatBank, one of Ukraine’s largest banks, posted revenue of 122.63 billion UAH—an 11% increase year-on-year—but its net profit fell by 28% to 29.08 billion UAH. The bank’s tax expenses in 2025 reached 58.88 billion UAH, equivalent to roughly 67% of its pre-tax profit.
“PrivatBank accrued about 37.5 billion UAH in profit tax after ceasing to recognize assets of former owners,”the bank stated.
Pyshny also raised the broader question of whether Ukraine wants a strong banking system capable of supporting the country’s recovery.
“Such disproportionate burden discriminates against the sector and scares off investors,”he warned. In response, Hetmantsev insisted that the tax does not deter investors and that bank return on equity in Ukraine remains among the highest in Europe.
The extension of the bank profit surtax has sparked considerable debate among economists and policymakers. Proponents argue the measure secures additional funding for critical areas like defense. Critics, including the central bank governor, underscore the risks to the banking system, which could affect lending and overall economic growth. In the context of war and economic uncertainty, the issue of bank taxation remains pressing and demands careful analysis.
As the Ukrainian government considers extending the bank profit levy, it's important to note that the National Bank has recently reported a record profit, significantly impacting the state budget. This substantial influx of revenue raises questions about how these funds will be allocated in the coming years. For a deeper understanding of the financial dynamics at play, see how the National Bank's profits are set to influence future budgetary decisions in our detailed analysis here.