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After the war, the military levy may be replaced by a reconstruction tax — the government is discussing the idea with the IMF

After the war, the military levy may be replaced by a reconstruction tax — the government is discussing the idea with the IMF

22 July 2026, 15:15

After the war, the military levy may be replaced by a reconstruction tax — the government is discussing the idea with the IMF — Military levy

The Ukrainian government is considering replacing the current 5 per cent military levy with a special tax for post-war reconstruction. This option is included in the updated Memorandum of Cooperation between Ukraine and the International Monetary Fund.

This has been reported by Interfax-Ukraine.

The document emphasises that once martial law ends, the military levy will remain in force for a further three years, after which it will automatically cease. To ensure the state budget does not lose a significant portion of its revenue, the government is already exploring possible alternatives to this levy.

One such option is the introduction of a reconstruction tax, which could come into force once the war has ended. The details are to be set out in separate legislation governing the transitional period following the lifting of martial law.

The IMF has endorsed this approach. The Fund notes that Ukraine must maintain stable tax revenues even after the war ends, as the country will have to simultaneously finance large-scale reconstruction and gradually restore the sustainability of public finances.

The memorandum also emphasises that, as military expenditure is reduced, the state will increase funding for infrastructure reconstruction and other priority areas; therefore, sources of budget revenue must remain reliable.

According to the State Tax Service, in the first half of 2026 alone, the military levy generated 94.2 billion hryvnias for the state budget, which is 25.6 per cent more than in the same period last year.

It should be recalled that the military levy rate for individuals was increased from 1.5% to 5% at the end of 2024.

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