Tax Strategy 2030: How New Rules and Reforms Are Transforming Ukrainian Business
In December 2023, the Ukrainian government approved the National Revenue Strategy for 2024-2030 a document that sets the direction for tax and customs system reform, considering EU integration, increased budget revenues, and the creation of conditions for economic recovery. This strategy is a response to long-term challenges from budget deficits to excessive “shadow” market activity and the urgent need to digitize state services.
The key objectives of the Strategy are to ensure macroeconomic and financial stability, maintain revenue mobilization rates, and reduce dependence on external financing. To achieve this, the government plans a whole range of interrelated reforms in tax and customs policy, administration, anti-corruption measures, and digitization.
One of the strategic directions is harmonizing tax and customs legislation with the EU. This concerns both excise rates on fuel, alcohol, and tobacco products, and rules of administration and transparency of procedures.
The introduction of modern digital solutions for tax and customs administration is another priority. According to the government’s plan, this will increase compliance with the law by both taxpayers and regulators, minimize human factors, and enhance transparency.
The projected impact of the planned reforms on budget revenues is estimated at 27% of GDP.
Concrete Steps: Which Taxes Will Change
The Strategy provides for fundamental changes in the simplified taxation system:
- complete ban on the simplified system for legal entities;
- increased taxes for individual entrepreneurs (FOPs);
- mandatory use of cash registers (RRO) for all “simplified taxpayers”;
- obligation to register as a VAT payer upon reaching the relevant threshold;
- requirement to keep records and documentary proof of the origin of goods.
For personal income tax (PIT), the strategy proposes:
- introducing a progressive scale higher rates for income above a certain level;
- abolishing the minimum non-taxable income and replacing it with targeted social assistance;
- reviewing benefits, special conditions, and exclusions from the tax base;
- giving tax authorities access to banking information on taxpayers’ account transactions;
- addressing the “substitution” of official employment relationships with fictitious self-employment.
In the area of corporate profit tax:
The Strategy provides for a review of investment incentives and tax breaks, the introduction of European rules for royalty taxation, and gradual harmonization of rates.
The issue of increasing the environmental tax particularly on carbon emissions is also relevant, though this step is postponed until after the war.
An important block involves anti-corruption measures and customs reform:
- giving internal security units more authority,
- introducing special conditions for civil service,
- attestation, rotation, systematic integrity checks,
- forming a personnel reserve and implementing new motivation systems.
Digitization of administration means creating HelpDesk units for rapid business inquiries, modernizing accounting and registration procedures, and automating control and information exchange with business.
Harmonization with the EU: What It Means for Business
The Strategy provides for bringing tax and customs policy to EU standards:
- raising excise rates on fuel, alcohol, and tobacco to the European minimum,
- gradual changes to the property tax base,
- tightening reporting requirements,
- increasing transparency of procedures and accountability for civil servants.
At the same time, much attention is paid to the regulation of virtual assets a topic that has become particularly relevant with the growth of the digital economy.
How Business Leaders See the Strategy: Balancing Expectations and Risks
Business reactions to the Strategy are cautiously optimistic, but with a number of reservations. Entrepreneurs acknowledge that digitization and unification with the EU can boost transparency, reduce the shadow economy, and stimulate investment, but they fear abrupt changes and increased tax burdens.
“When taxes make up 80% of a product’s price, and for ‘gray-black’ producers it’s 0%, it becomes increasingly difficult to compete with such ‘prices’. Ukraine loses opportunities to fill the war budget, even though it has all the tools needed to reduce the shadow sector in taxation,” notes Vadym Novosad, Director of Corporate and Legal Affairs at Imperial Tobacco Ukraine.
Market participants stress the need for balance between raising taxes and fostering development. Excessive fiscal pressure may lead to more shadow schemes, especially in excisable sectors, healthcare, retail, and banking.
The Shadow Market: The Main Challenge for Reform
The shadow market share in the tobacco industry, according to Kantar Ukraine research, reached 15.4% in July 2025. Budget losses from illegal production and pseudo-export are estimated at over 25 billion hryvnias annually.
Vadym Novosad emphasizes:
“Tougher sanctions for illegal circulation of excisable goods and differentiation between criminal and administrative liability for such activities, as stipulated in draft law No. 9364, are essential for reducing the ‘shadow’ market.”
At the same time, business representatives point out that chaotic and unpredictable legislative changes, as well as a lack of political will for real anti-shadow action, can nullify all efforts towards de-shadowing.
How Sectors Are Responding: From Excise Goods to Medical Services and Banking
Tobacco Industry
Producers of excise goods unanimously emphasize: the sector’s success depends on de-shadowing and a stable tax policy.
Vadym Novosad, Imperial Tobacco Ukraine, explains:
“The balance of the excise calendar and the absence of sharp tax jumps allow us to plan business and investments.”
The main issues are unequal competition with illegal producers, excessive regulation, and delays in implementing electronic control systems. Sharp increases in excise taxes lead to an expansion of the shadow sector, and the budget loses billions of hryvnias. Most companies note: if the state does not strengthen the fight against illegal trade, the legal market will continue to shrink.
Metallurgy
The sector is showing negative dynamics, primarily due to VAT issues.
Ferrexpo notes:
“Due to the withholding of VAT refunds, our socio-economic contribution in 2025 will be $180 million less than it could have been. In 2026, this figure will increase to $240 million.”
Restaurant Business and Retail
In public catering (“McDonald’s”, Fozzy Group), the number of customers and tax payments is increasing, but development is held back by unequal competition the simplified system gives some players advantages, and “envelope” wages and “grey” imports remain common.
Fozzy Group emphasizes:
“When part of the business operates in the ‘shadows’, it creates distorted rules of the game: honest companies lose their competitive edge, consumers lose quality guarantees, and the state loses billions of hryvnias.”
Food and Beverage Producers
Sector leaders (“Carlsberg Ukraine”, IDS Ukraine) demonstrate consistent tax payments and support for open dialogue with the state, but stress the need for a predictable and objective tax policy.
Carlsberg Ukraine underlines:
“The principles of openness and mutual trust between the state and taxpayers are an important prerequisite for the stable development of the business environment and the effective functioning of the tax system.”
Banking Sector
For banks, the key is balance between state requirements, tax burden, and market competition.
PUMB notes:
“I would separately highlight the government’s intention to re-tax the banking sector at 50%, instead of the 25% approved for this year. This is a significant burden on bank capital, which, in the face of new external threats and internal challenges, could turn into serious problems.”
Additionally, banks draw attention to the inadequacy of the criteria for assessing voluntary tax compliance, which do not take into account the specifics of banking activities.
IT and Digital Services (Uklon)
The sector supports EU harmonization and digitization, and transparent tax payments.
Uklon notes:
“We expect the Ukrainian authorities to create a favorable environment for business development and growth. Business must be transparent and honestly fulfill its tax obligations.”
Business Problems and Expectations: Fiscal Pressure, the “Shadow” Sector, and Political Will
Most industry leaders stress: the main threat to development remains the “shadow market,” rule instability, and political uncertainty.
Market reports confirm: envelope wages, smuggling, VAT manipulation, the use of sole proprietorships (FOPs), and offshore operations remain the main schemes for tax evasion.
Experts and analysts agree:
- Effective action against the “shadow” sector requires not so much new laws as real political will, transparency of actions, and coordination between fiscal, law enforcement, and judicial authorities.
- For business, the decisive factors are stability, predictability, and a balance between fiscal burden and support for development.
The Main Challenge Balance Between Reform and Reality
The pace of reforms offers a chance for positive change but only if the new tax strategy is implemented consistently, taking into account the real situation in the market and business needs.
“Chaotic and unpredictable lawmaking not only prevents building medium- and long-term development plans, but also causes losses and damage to legal producers,” market participants emphasize.
The National Revenue Strategy until 2030 is a chance for profound transformation of the Ukrainian economy, real action against the shadow sector, and effective integration into the European space. But this requires not only a legislative framework, but also political will, dialogue with business, and clear accountability from all participants in the process. Only then will tax reform become not just a change in rates, but an instrument for the development of the country, its economy, and social stability.
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