Bankers Forecast Significant Shadowing of Business After Tax Increase.

The increase in taxation will push businesses into the shadows, according to participants of the round table "Winter is Coming: Is Business Ready for Energy Challenges and New Tax Reality," conducted by the Financial Club.

Oleg Fedorenko, director of the corporate client sales department at TAScombank, predicts that tax increases will force businesses to use the shadow economy if they want to survive. This also applies to the population.

The increase in taxes will also lead to a rapid rise in inflation and a worsening investment climate, notes Oleg Fedorenko. Companies will incorporate the taxes into the cost of goods, leading to their price increase. At the same Time, this will not encourage investors to invest in Ukraine.

Oksana Stetskiv, executive director of the network management direction at Kredobank, emphasizes that the authorities expect to receive 140 billion UAH in additional budget funds. However, this tax increase will negatively affect sole proprietors in the first, second, and fourth categories, who are small businesses and the weakest link in the economy.

Valeriy Terno, head of the corporate sales department at OTP Bank, states that the tax increase will lead to a growth of business participants moving into the shadow sector, hiding income and minimizing tax burden. However, this may negatively affect cooperation with banks, which will lack the capability to provide sufficient financing for such debt. Additionally, an increase in VAT could be yet another burden on business, but it will continue to operate, albeit with lower profits.