The government plans to raise taxes due to Russian attacks on businesses.

Ukrainian businesses could suffer losses of $10 billion due to Russian attacks in 2026. The government plans to create a special insurance fund to cover military risks, but may propose increasing the value-added tax to fill it.

Minister of Economy and Environment Oleksandr Kravchenko announced this during a meeting with journalists, reports a hromadske correspondent.

“We estimate that damage to businesses as a result of attacks this year could reach $10 billion. This is an unprecedented scale,” the minister said.

According to him, current support mechanisms, in particular the loss compensation programs and the 5-7-9% preferential lending programs, are insufficient. They are primarily targeted at small and medium-sized businesses and do not cover the needs of large enterprises.

The Ministry of Economy plans to expand existing programs, but the government’s capabilities are limited due to a lack of budgetary resources.

Therefore, the government is proposing to create an insurance fund to help businesses quickly recover from Russian attacks. It will cover so-called initial damage—businesses will be able to receive up to $10 million per group of companies.

“We won’t be able to compensate every enterprise for 100% of the damage. But we can create a system that will provide businesses with guaranteed start-up capital for a rapid recovery. This will ensure funds are available to quickly restore critical equipment, retain personnel, and avoid losing contracts,” Kravchenko explained.

The insurance cost is planned to be set at 2% of the coverage amount within a certain limit. Private insurance companies are also expected to participate in the program.

Insurance payments are expected to begin on January 1, 2027. However, this will depend on whether the necessary funding sources can be found by then.

The fund’s total capital is planned to be $2–3 billion. According to Kravchenko, there are currently no available budgetary funds to fill it.

In this regard, the government is considering increasing VAT. The minister called this the only solution that would quickly raise the minimum necessary funds to support businesses amid intense Russian shelling.

At the same time, Kravchenko emphasized that there is no final decision yet on raising taxes—the issue is still under discussion.