Ukraine’s parliament, the Verkhovna Rada, rejected a bill on March 10 to tax income earned through digital platforms. Bill #14025 received only 168 votes, falling far short of the 226 required for approval. During the meeting, the Speaker of the Parliament suggested that lawmakers reconsider the draft law later or send it to the government for more changes, but the Parliament also rejected these proposals.
Many thought the bill would be approved on the first reading, as it is a mandatory condition (structural benchmark) in Ukraine’s financing program with the International Monetary Fund (IMF).
Beyond taxing digital services, the bill intended to serve as a vehicle for several other IMF requirements that Ukraine must fulfill to receive funds under the IMF program.
Yaroslav Zhelezniak, MP, reported on Telegram, that the government planned to add a few more amendments for the second reading that would include:
- Abolishing the €150 ($175) tax-free limit on international postal items.
- Introducing VAT for sole proprietors (FOPs).
- Making the 5% military tax permanent, after martial law ends.
Finance minister Serhiy Marchenko, who presented the bill, according to the transcription, stated that while income from digital platforms is currently subject to a standard 18% rate, the bill proposed a discounted 5% tax for those who register a special, transparent bank account accessible to tax authorities. For others, the total tax burden would effectively rise to 23% (including the 5% platform levy), applicable to those earning above the annual Hr. 38,500 ($890) per year.
The legislation divided Ukraine’s major digital players. Major taxi platforms, including Uklon, Bolt, Uber, and delivery platform Glovo supported the bill, viewing it as a move toward a transparent market. They stated that reporting user data to the State Tax Service would help move the sector out of the “gray zone.”
However, OLX, a major online marketplace, opposed the move. The company warned that forcing occasional sellers to report data or pay taxes would create a bureaucratic burden, potentially driving users away from the platform.
The push for these tax changes stems from the National Revenue Strategy presented in late 2023, aimed at boosting domestic income. The IMF has asked Kyiv to broaden its tax base.
The Ministry of Finance faced heavy opposition when it first introduced VAT reforms in December 2025.
To ease the blow, during the consideration of the new IMF program in February 2026, officials suggested raising the VAT revenue threshold to Hr.4 million ($93,000).
Despite these attempts at compromise, parliamentary sources told Kyiv Post that a lack of communication between the government and lawmakers led to a “whispering campaign” and general confusion during the last few voting weeks – in February alone, the bill on taxation of digital platforms was avoided for consideration twice during sessions.
Opposition MPs, including Nina Yuzhanina, said that lawmakers were often left in the dark about what they were committing to, leading to the collapse of the vote on Tuesday.