Over UAH 257 Billion in Taxes Over Three Years: Why Banks Need to Preserve Capital for Lending — Mamedov
Between 2023 and 2025, Ukrainian banks accrued over UAH 257 billion in corporate income tax. However, maintaining an elevated tax burden could limit banks' ability to build up their own capital, which is essential for expanding business lending and supporting economic recovery.
This was discussed by Serhii Mamedov, Vice President of the Association of Ukrainian Banks and Chairman of the Management Board of GLOBUS BANK, in a new podcast on the Finance.ua YouTube channel.
According to the banker, Ukraine's financial sector recognizes the need to generate revenue for the state budget, especially during wartime. At the same time, it would be incorrect to assess the effectiveness of higher taxation solely in terms of budget revenues. Bank profits are an important source of capital formation, which determines banks' capacity to lend to businesses and households. “When discussing taxes on banks, we need to consider the entire economic chain: profits generate capital, capital enables lending, and loans support production, investment, and jobs. If one of these links is weakened, the consequences may eventually be felt throughout the economy”, — Serhii Mamedov explained. The banker recalled that in 2023 and 2024, the corporate income tax rate for banks was 50%, with the relevant decisions adopted retroactively. In 2025, the rate was reduced to 25%, but in 2026 it was raised back to 50%.
In addition, on October 27, the Verkhovna Rada passed Draft Law No. 15262 in its first reading, providing for the extension of the increased tax rate into 2027. According to Serhii Mamedov, this practice creates risks not only for banks' capital accumulation but also for long-term lending plans. This is particularly relevant to financing production projects, business modernization, and the restoration of damaged facilities, where funding needs may extend over several years.
Another topic discussed in the podcast was international experience with increased taxation of banks. In particular, the discussion covered the findings of an analytical study initiated by Serhii Mamedov in cooperation with Ukraine Economic Outlook. The study examined more than 50 cases of additional taxes imposed on the banking sector in various countries over the past 25 years.
As the expert noted, international experience shows that the consequences of such decisions can extend far beyond tax policy, affecting lending rates, banks' investment attractiveness, and their willingness to finance the economy. At the same time, Serhii Mamedov believes that the interests of the state budget and the banking system should not be viewed as opposing priorities. Rather, the key is to find a balance that allows the financial sector to generate substantial tax revenues while maintaining sufficient capital to support lending and economic growth.
“For the state, what matters is not only how much revenue the budget receives today, but also what opportunities the economy will have tomorrow. That is why every tax decision should be assessed in terms of its long-term impact: whether it will help make the country economically stronger”, — Serhii Mamedov concluded.
This was discussed by Serhii Mamedov, Vice President of the Association of Ukrainian Banks and Chairman of the Management Board of GLOBUS BANK, in a new podcast on the Finance.ua YouTube channel.
According to the banker, Ukraine's financial sector recognizes the need to generate revenue for the state budget, especially during wartime. At the same time, it would be incorrect to assess the effectiveness of higher taxation solely in terms of budget revenues. Bank profits are an important source of capital formation, which determines banks' capacity to lend to businesses and households. “When discussing taxes on banks, we need to consider the entire economic chain: profits generate capital, capital enables lending, and loans support production, investment, and jobs. If one of these links is weakened, the consequences may eventually be felt throughout the economy”, — Serhii Mamedov explained. The banker recalled that in 2023 and 2024, the corporate income tax rate for banks was 50%, with the relevant decisions adopted retroactively. In 2025, the rate was reduced to 25%, but in 2026 it was raised back to 50%.
In addition, on October 27, the Verkhovna Rada passed Draft Law No. 15262 in its first reading, providing for the extension of the increased tax rate into 2027. According to Serhii Mamedov, this practice creates risks not only for banks' capital accumulation but also for long-term lending plans. This is particularly relevant to financing production projects, business modernization, and the restoration of damaged facilities, where funding needs may extend over several years.
Another topic discussed in the podcast was international experience with increased taxation of banks. In particular, the discussion covered the findings of an analytical study initiated by Serhii Mamedov in cooperation with Ukraine Economic Outlook. The study examined more than 50 cases of additional taxes imposed on the banking sector in various countries over the past 25 years.
As the expert noted, international experience shows that the consequences of such decisions can extend far beyond tax policy, affecting lending rates, banks' investment attractiveness, and their willingness to finance the economy. At the same time, Serhii Mamedov believes that the interests of the state budget and the banking system should not be viewed as opposing priorities. Rather, the key is to find a balance that allows the financial sector to generate substantial tax revenues while maintaining sufficient capital to support lending and economic growth.
“For the state, what matters is not only how much revenue the budget receives today, but also what opportunities the economy will have tomorrow. That is why every tax decision should be assessed in terms of its long-term impact: whether it will help make the country economically stronger”, — Serhii Mamedov concluded.