The Parlament of Ukraine has once again raised the corporate income tax on banks — to 50% starting in 2026

Officially, this measure is temporary, until the first quarter of 2027. In practice — it is the third consecutive extension.

For the state budget, it is a quick fix: according to estimates, the government will collect an additional UAH 15–23 billion in 2026. In wartime conditions, that looks tempting. The banking sector remains profitable — with over UAH 150 billion in net profit in 2024 — so the political logic is simple: “take it from those who have it.”

From an economic standpoint, however, this is a risky move. The National Bank of Ukraine (NBU) has now warned for the third time that increasing the tax rate to 50% could have negative consequences. The same concerns were voiced in 2023 and 2024: the regulator officially opposed the measure, warning of loss of trust in the tax system, declining lending, and distorted competition. Yet nothing followed beyond public statements — the NBU has offered no concrete calculations or alternatives, such as a windfall-profits tax applied above a certain threshold.

Another nuance: the NBU appears concerned only about state-owned banks, arguing that they may need recapitalization from the budget. But what about the private sector? They will also lose capital and reduce lending. Still, within the logic of Donornomics, the state thinks in terms of the cashbox, not the ecosystem.

This has become a chronic feature of Ukraine’s fiscal policy — adopting laws that take retroactive effect. Formally, the changes apply from the beginning of the year, even though they are passed in the autumn.

The motive is clear: the Ministry of Finance wants to avoid losing even a single month of revenue. So the law is “switched on” retroactively to collect more, even if it undermines the principle of legal certainty.

For banks, this is a double blow. First, they have already paid advance contributions and built reserves under the previous rates. Second, their audited financial statements will have to be revised — affecting dividends, capital ratios, and even international obligations to shareholders.

In essence, this represents retroactive taxation, something prohibited in most civilized jurisdictions. In a rule-of-law state, a tax cannot be applied retrospectively, because businesses have the right to plan their financial decisions in advance.

In Ukrainian Donornomics, however, this has become the norm: the state recalculates reality ex post whenever the budget springs another leak.