MP Yuzhanina warns Ukraine risks financial crisis, criticizes populist spending, urges tax reform caution, and highlights threats to local budgets and defense funding.
Ukraine faces growing financial pressure as lawmakers warn that continued populist spending could push the country toward a fiscal crisis.
Nina Yuzhanina, a member of parliament from the European Solidarity faction, has sharply criticized current government policy, arguing that Ukraine’s economic strategy lacks long-term planning and risks undermining both local budgets and defense funding.
Speaking to local media, Yuzhanina called for an immediate halt to what she described as “populist programs,” including the National Cashback initiative and similar spending efforts. According to her, Ukraine has spent approximately 99.6 billion hryvnias on such programs over the past seven months.
She warned that the country’s financial reserves could last only until summer, echoing concerns previously reported by international outlets citing Ukrainian and foreign officials.
Yuzhanina also raised concerns about proposed tax reforms, particularly discussions around introducing value-added tax (VAT) obligations for sole proprietors (FOPs). She suggested that such measures are premature and tied to European Union requirements that should only be implemented once Ukraine becomes a full EU member.
Instead, she urged the Ministry of Finance and tax authorities to focus on improving transparency and administration of existing tax systems to avoid placing additional burdens on small businesses.
A key concern highlighted by Yuzhanina is the potential impact on local budgets. She noted that sole proprietors contributed nearly 57 billion hryvnias in single tax revenues to local governments in 2025, warning that removing or altering this system could leave municipalities without critical funding.
She also pointed out that military-related personal income tax revenues have already been centralized, raising further concerns about how local governments will sustain essential services and infrastructure.
“The government is making decisions without proper coordination with parliament,” Yuzhanina said, adding that such an approach risks policy gridlock and financial instability.
Her comments come at a time when Ukraine continues to rely heavily on international financial assistance while managing the economic strain of ongoing war.
While no immediate policy changes have been announced, the warnings highlight increasing tensions over fiscal strategy and the balance between social spending and wartime economic sustainability.
Tags: Budget Crisis financial crisis Politics Ukraine Tax Reform Ukraine economy war economy
