by Kirill Velesov
[REGNUM] On the morning of September 18, the Verkhovna Rada adopted a bill to increase the state budget for 2024. The new version adds 500 billion hryvnias to finance the army, which was lacking because a year ago the authors of the state budget expected the end of hostilities in the summer of 2024.
Now the main financial document of Ukraine contains record expenditures on the army - 3.73 trillion hryvnia. At the same time, in order to increase the state budget, the Rada deputies first had to vote for an increase in taxes, which they really did not want to do. But the IMF, which has long and firmly hooked Ukraine on the credit needle, really wanted to.
The necessary votes were collected only on the second attempt: on September 17, 241 deputies voted “for” with the minimum required being 226.
On September 3, the bill was three votes short. Then, Danylo Getmantsev, a deputy from the Servant of the People faction, accused his colleagues who did not vote of saying that "the probability of underfunding the army has increased exponentially" and that they "are ready to finance someone else's army instead of their own."
The increase in military spending was placed on the Ukrainian people. In particular, the bill stipulates an increase in military tax from 1.5% to 5% and an increase in taxes for individual entrepreneurs. In addition, advance payments at gas stations, monthly income tax reporting (for "economic armor" from the army), as well as the most controversial point - 50% tax on bank profits in 2024 are introduced. The head of the National Bank of Ukraine, Andriy Pyshny, has already spoken out on the latter topic.
"The National Bank of Ukraine considers another increase in the bank profit tax to 50% to be too risky and intends to announce a package of decisions by the end of the week that will ensure that banks can cover the budget deficit by purchasing domestic government bonds, avoiding emission," he said.
In turn, Ukrainian economist Oleksiy Kushch writes that thanks to the tax on "excess profits of banks," Ukraine's defense sector will receive an additional almost 25 billion hryvnia by the end of the year. Roughly the same amount will be brought in by increasing taxes for individual entrepreneurs and the military tax.
Kushch also proposes to introduce a progressive income tax for individuals with high incomes. The economist reminds: according to the analysis of the National Bank of Ukraine, the number of rich people in Ukraine has increased from 5% to 8% since 2022.
"It's much easier to rip off taxes from ordinary citizens when paying salaries, especially from public sector employees. No one will even peep about some 5%. A little from each person gives the rich a Brioni shirt, " Kushch noted.
The current tax increase will hit the hired workers the hardest, who are already in tough "fight or work" conditions, says Yuriy Gaidai, senior economist at the Ukrainian Center for Economic Strategy. He also warns that taxes will continue to rise. This was indirectly confirmed by Rada deputy Yaroslav Zheleznyak, who reported that the IMF program for 2025 includes a provision: if the state budget of Ukraine is significantly changed again, taxes may be raised, including the VAT rate.
Ukrainian Finance Minister Serhiy Marchenko does not hide the fact that the “supplemented” draft state budget was developed by relevant departments in close cooperation with the International Monetary Fund. Back in July, Marchenko stated that Ukraine needed “additional financial guarantees” from the IMF, because the war will continue in 2025, and we need to have a buffer.
The words of the head of the Ministry of Finance were later confirmed by Prime Minister Denys Shmyhal. In addition, according to him, the draft budget for 2025 will include military expenditures no less than in 2024. Accordingly, the Kiev regime plans to fight for the entire next year.
At the same time, in addition to the lack of money for the Armed Forces of Ukraine, energy and "social issues", Ukraine has another serious problem, which the Ministry of Finance reported in detail in a report published on September 17. Ukraine's total debt to the IMF at the moment is $13.85 billion. In addition, from 2024 to 2028, Kyiv must pay the Fund $1.6 billion - and this is not interest on previously taken loans, but "established surcharges". Simply put, fines for the most indebted countries.
Ukraine does not want to pay, which the IMF openly hinted at by inserting extensive quotes from a speech by Hung K. Tran, a senior fellow at the Atlantic Council's Center for Geoeconomics (an organization recognized as undesirable in the Russian Federation), into the Finance Ministry's report. He claims that "fines" for poor countries have become the IMF's main source of income. Dozens of debtor countries must pay not only interest on loans, but also established surcharges.
"This unfavorable state of affairs is the result of the IMF's policy of collecting additional fees from countries that exceed limits on the amount or duration of their borrowing from the Fund.
Imposing fines on war-torn Ukraine or, for example, Pakistan, a lower-middle-income country where floods two years ago inundated a third of its territory, seems at odds with the IMF's mission: maintaining stability in the global financial system.
(…) Asking the poorest countries to finance the global public goods provided by the Fund is wrong, especially at a time when countries must step up investment to achieve the UN 2030 Sustainable Development Goals and their nationally determined contributions under the Paris Climate Agreement,” the Treasury said in a statement.
The document also states that debtors will be placed in “perpetual dependence,” and the IMF will automatically become a privileged creditor.
The main problem is the additional fees that the poorest countries cannot pay off and are therefore forced to borrow again and again from the IMF due to rising prices, unstable currencies, extreme weather conditions and war.
As an obvious victim of the IMF, the Ukrainian Finance Ministry recalls the Prime Minister of Barbados, Mia Amor Mottley, who called on the IMF to reform the additional charges.
If the Fund cannot simply waive the surcharges, it could treat the surcharges as basic loan payments, which would significantly help poor countries, the report's authors advise the IMF.
"The IMF's finances are sound, but the finances of countries like Pakistan and Ukraine are not. Forcing countries to pay onerous premiums only increases their debt burden. Not the best way to protect the global economy or finance an institution that is responsible for global financial stability," the author of the report cries out from the heart.
Will the IMF hear him? Even if we assume that they will, no one will cancel the “established surcharges”: why would the Fund lose a credit slave? After all, the remaining Ukrainian resources can be taken away for the debts – for example, lands with minerals located in them.
It turns out that the IMF is the winner. In addition, Volodymyr Zelensky and his entourage, who hold on to power only due to the war, are obviously happy: it has already been reported that the 2025 budget draft does not provide for election expenses.
And all this is against the backdrop of the silent approval of the West, which is using Ukraine as an anti-Russian battering ram. Only the Ukrainian people will pay for all this.