By KYIV. Nov 30 (Interfax-Ukraine) – An increase in the bank profit tax from 18% to 50% in 2023 and up to 25% in subsequent years may provoke an increase in loan rates by financial institutions and a decrease in deposit rates in order to ensure stable profitability in the context of a higher tax, the president of the Association of Ukrainian Bankers, Andriy Dubas, believes.
“We are not saying that this bill will now lead to unprofitability of the banking system… We are talking about ensuring that the banking sector remains at a sufficient level of profitability. I think that the spread between interest on loans and interest on deposits may increase in order for banks could draw a tax of 25% and not be unprofitable,” Dubas expressed his opinion in a comment to the Interfax-Ukraine agency.
We are talking about law No. 9656-d on increasing taxation of banks, adopted by the Verkhovna Rada on November 21.
“Therefore, I think that banks will analyze the situation that has developed in connection with the bill adopted by the Verkhovna Rada, and will build their business model, their activities in order to continue to be profitable,” added the association president.
Speaking about the association’s position regarding the adopted law, he said that “in wartime conditions, the volume of taxes may increase, but, in our opinion, it is not very correct to tax the previous period,” since the entire banking sector planned its activities with the expectation that the tax on profit will be 18%.
“In any future negotiations, we can always be reproached that Ukraine, despite wartime conditions or otherwise, can change the tax base, tax system or tax approach at the end of the year from last year,” he explained.
According to Dubas, if the authorities have a need to increase the rate of certain taxes, then this should be done not within the framework of one industry.
