Systemic problems with tax payments have been identified in Ukraine’s construction sector
A number of systemic problems have been identified in Ukraine’s construction sector, relating to tax payments, wage levels and the formal employment of staff. An analysis of the activities of the largest companies has revealed several worrying trends.
The construction sector also warrants special attention, as it is facing systemic problems.
An analysis of the performance of Ukraine’s top 60 construction companies reveals a number of worrying trends:
- in 84% of companies, the VAT payment rate for January–April 2026 is less than 3.02% of the industry average, whilst some large developers declare zero VAT liabilities at all;
- over 70% of taxpayers report an average salary below the market rate, and in some cases close to the minimum wage. According to Work.ua, the average salary in the construction sector is 35.1 thousand UAH;
- 33 per cent of taxpayers have fewer than 50 employees on their books, which may indicate widespread use of undeclared labour.
As a result, the budget is missing out on tax revenue, whilst companies operating above board and paying their taxes honestly are forced to compete with those who enrich themselves through shadow schemes.
I draw the attention of the Economic Security Bureau of Ukraine (ESBU) and the State Tax Service to the need to strengthen control measures aimed at combating the shadow economy in the construction sector and ensuring tax compliance.
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