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Automatically translated version. May contain inaccuracies compared to the original.
If throughout the years of the war Russian strikes on businesses were more targeted than systematic, since the end of summer the situation has sharply worsened — Russia is bombing everything it can reach: marketplaces, logistics routes, warehouses, production facilities. Everyone is suffering losses — small, medium, and large businesses — so obviously their owners can no longer face these problems alone. Destroyed businesses mean job losses and reduced tax revenues; combined with blocked sea export routes, this creates an extremely difficult situation for the Ukrainian economy. That will primarily affect the ability to finance the army and servicemembers.
Can the state quickly find solutions to rapidly bring damaged businesses back to life? What support measures can it offer when the budget is critically underperforming on tax revenues? Can banks help with concessional lending, especially to large businesses, which has always been problematic in Ukraine? What do entrepreneurs themselves expect from the government? These questions were the subject of discussion at the LB.talks platform as part of the special project “Epicenter of Producers,” attended by:
Oleksandr Kravchenko, Minister of Economy and Environment of Ukraine;
Halyna hereha, co-founder and Chief Financial Officer of the Epicenter K group of companies;
Serhii Nykolaichuk, First Deputy Governor of the National Bank of Ukraine (NBU);
Nina Yuzhanina, Member of Parliament, member of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy;
Tetiana Ostrikova, member of the Supervisory Board of JSC AltBank, member of the Supervisory Board of the All‑Ukrainian Public Organization “Association of Lawyers of Ukraine.”
Tetiana Ostrikova, Nina Yuzhanina, Halyna hereha, Serhii Nykolaichuk and Oleksandr Kravchenko during the discussion
We publish an adapted version of a difficult conversation in which business and government sought quick and effective solutions — and kept uncovering new problems.
How Russia is destroying Ukrainian business. The Epicenter case
According to Epicenter K co‑founder Halyna hereha, more than 30 of the company’s facilities have already been completely destroyed or damaged by rocket and Shahed drone attacks. In total this is more than a million square meters of retail, logistics, and production space. The company’s losses amount to over 1 billion dollars.
“Just in the past month, when the attacks on business have been especially brutal, we lost 7000 jobs. For me this is the most painful issue. People are the most valuable thing each of us has,” Halyna hereha said.
Halyna hereha, co‑owner and Chief Financial Officer of the Epicenter K group of companies
The Epicenter co‑founder noted that since the start of the war the company tried to handle the problems caused by attacks on its own. But the systematic nature and scale of the bombings have led to a situation where today attacked Ukrainian businesses cannot quickly rebuild what they spent decades building without state support.
“We put out fires because the State Emergency Service cannot operate while there is a threat of shelling. After each strike we repair and restore something, we now have to find money for firefighting equipment, for mobile shelters near every shopping center to protect employees and visitors…” Halyna hereha said.
According to statistics, more than 50% of warehouses in Ukraine have been destroyed to date. The total size of business losses in 2026, according to the Ministry of Economy and Environment of Ukraine, is about 10 billion dollars.
Thus, hereha emphasizes, businesses urgently need state support, long‑term loans to rebuild and build new logistics space, and insurance against wartime risks — issues that have been discussed for more than a year.
Do Ukrainian banks have money to lend to business?
Is there enough liquidity in the Ukrainian banking system to cover the economy’s recovery needs? “No,” stated NBU First Deputy Governor Serhii Nykolaichuk. That, he emphasized, means the country needs various financing mechanisms.
Serhii Nykolaichuk, First Deputy Governor of the NBU
As the NBU’s First Deputy Governor noted, since the start of the full‑scale invasion one of the most popular lending programs became the government initiative “5‑7‑9” to support small and medium‑sized businesses. At times when banks were cautious about the risks associated with the war and uncertainty, it became an important impetus for restoring lending during the war.
In 23/24 this program became so popular that the state owed banks 10 billion hryvnias in interest compensation. Therefore, Nykolaichuk notes, in 25 it was targeted exclusively at problematic zones that truly needed state support.
“Lending under the ‘5‑7‑9’ program slowed significantly, while business loans in hryvnia outside this program grew by almost 50%, — the NBU representative said. — But unfortunately, in 26 business faced a number of new problems. Russia reoriented its attacks largely toward the commercial sector, which accordingly required state support through various instruments. And the ‘5‑7‑9’ program became one of them. Now the growth rates of the loan portfolio within and outside the program have equalized — plus or minus 34%, according to the latest data,” Serhii Nykolaichuk said.
However, the need for long‑term loans has also become acute for damaged large businesses that do not fall under concessional state lending programs. They need large, long‑term financing.
Nykolaichuk says the NBU’s initiative to develop capital market infrastructure is aimed at creating a mechanism to attract funds from various investors through the capital market.
“If we talk about the banking business, our efforts focus not only on helping the government calibrate business support programs in current conditions, but also on making the banking sector competitive and attractive for foreign capital, because we need to significantly increase the capital of the banking system to strengthen its ability to finance the economy,” Serhii Nykolaichuk said.
Serhii Nykolaichuk, First Deputy Governor of the NBU
He added that raising the equivalence level of Ukrainian banking regulatory legislation to European standards — from 50% in 22 to 82% by the latest data — is one of the outcomes that make the Ukrainian market more attractive and sends positive signals to foreign investors about entering the capital of Ukrainian banks.
“These are still small steps, but without such steps we are unlikely to achieve the result we need,” Nykolaichuk noted.
So far, he said, the only way international partners support Ukrainian bank lending is through portfolio guarantees from the European Investment Bank, the EBRD, and some Ukraine Facility mechanisms. And European partners mostly cooperate with banks with international capital, so these programs need calibration to increase effectiveness.
Therefore, Ukrainian banks are currently the most accessible source of credit for businesses. But their ability to finance recovery can be significantly undermined by additional taxation of bank profits, Serhii Nykolaichuk emphasizes.
Currently the corporate profit tax rate for the banking sector is 25% (higher than for other sectors, which pay 18%). However, to fill the budget this rate for banks has already been increased three times to 50%.
“If this budget measure remains in 2027, it will in effect be the fourth rate increase. And such a step would be harmful to the banking sector,” the NBU First Deputy Governor believes.
This view was echoed by the head of the international business community Board, economics professor and founder of the Advanter Group Andrii Dligach. He believes that reinstating the 50‑percent profit tax on banks contradicts the economic logic of rapid recovery.
“We can’t go down that path. We looked at the multiplicative effect: if this money returns not through state budget financing of the deficit but to business — the effectiveness for the state budget is 30% higher,” he emphasized.
Founder and CEO of Advanter Group and the international business community Board Andrii Dligach
What the state offers business
“Difficult times for the Ukrainian economy and Ukrainian business. The Ministry of Economy estimates business losses in 2026 at approximately 10 billion dollars. Combined with closed ports, that is tremendous pressure on the Ukrainian economy.
So for the ministry the priority is supporting businesses that pay taxes, finance the Armed Forces, and provide each community with critical services and goods. Right now we are doing everything we can. In particular, we are expanding the wartime risk insurance program for businesses and have included Kyiv and Kyiv region among the higher‑risk territories. We expanded the list of assets (for damage or destruction of which a business can receive compensation),” said Minister of Economy and Environment Oleksandr Kravchenko.
He also noted that they have managed to scale up concessional loans for large enterprises.
Oleksandr Kravchenko, Minister of Economy and Environment of Ukraine
“This is what we can provide now. We understand that it is not enough. That it is not comparable to the challenges businesses face. But we have very limited fiscal resources. (As MP and Deputy Chair of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy Yaroslav Zhelezniak noted, in 8 months Ukraine has already lost 61 billion hryvnias in VAT revenues; the Ministry of Finance foresees that by year‑end tax service underperformance will grow to 70 billion. — Ed.).
“That means we need to look for alternative, additional solutions,” the minister of economy and environment stated.
One such solution, Kravchenko believes, could be a wartime insurance mechanism supported by the state.
Wartime risk insurance has been discussed periodically since 22. But this initiative has not been implemented on a large scale — Ukrainian insurance companies do not have enough capital to take on current risks. Insurance through MIGA (Multilateral Investment Guarantee Agency of the World Bank) has been limited and patchy, and recently, Kravchenko noted, it has almost stopped working.
“I don’t see another option other than trying to launch a large‑scale wartime insurance mechanism with state support. Again, for it to work at the scale of the challenges businesses now face, and to send a serious signal to business, we must capitalize it sufficiently,” the minister detailed.
To capitalize the fund, the state plans to increase VAT by 1 percentage points (this provision is already included in the draft budget for 2027, but has not yet been approved by the Verkhovna Rada. — Ed.). The insurance premium for businesses is planned at 2% of asset value. The compensation to businesses would be up to 10 million dollars for the first loss from a Russian attack.
Oleksandr Kravchenko, Minister of Economy and Environment of Ukraine
“It seems to me we have a chance to mobilize sufficient capital. Second, I think this is a relatively efficient use of state funds, because we are actually creating a large leverage for private and donor capital. The state provides some resource that attracts donor financing.
2% that we ask businesses to pay is additional capitalization of this insurance fund from the purely private sector. In addition, the private insurance market steps in. After the state covers the first losses, the insurance market is ready to insure the excess risk for adequate premiums.
So through state funds we mobilize many different options of donor and private capital so that the total capital supports Ukrainian business and the Ukrainian economy. I think this mechanism can work at scales adequate to current challenges. Will it be sufficient? No. But it could be a major win for the Ukrainian economy,” Oleksandr Kravchenko explained.
However, a possible VAT increase of 1% sparked a heated debate. The hall included both supporters and critics of this approach.
Tetiana Ostrikova, member of the Supervisory Board of JSC AltBank, member of the board of the All‑Ukrainian Public Organization “Association of Lawyers of Ukraine”
“I do not support increasing the VAT rate. According to available information, a one percentage point increase in the VAT rate yields roughly one billion dollars. That is 45 billion hryvnias. Given the total business losses already cited, how long will these funds last? And what will we do when this resource runs out? Raise VAT again? — Tetiana Ostrikova, member of the Supervisory Board of JSC AltBank and of the Supervisory Board of the All‑Ukrainian Public Organization ‘Association of Lawyers of Ukraine,’ protested. — We understand VAT is a consumption tax. We will all pay more in the price of goods because of those percentage points.”
Funding for damaged business is needed now, so it is extremely important to understand whether there are any real possibilities to fill a concessional loan program for large business — which everyone has been waiting for — and how this fund could be capitalized.
Large business is not eligible for lending under the “5‑7‑9” program, so we are waiting for concessional lending programs and terms. I would develop that idea further. Not a rate increase,” she said.
MP and member of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy Nina Yuzhanina also doubts the viability of the wartime risk fund announced by the minister of economy.
Nina Yuzhanina, Member of Parliament, member of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy
“A fund with state participation will be hard to capitalize. Because 1% VAT (the proposed increase. — Ed.) is questionable. 90% won’t be voted for,” the MP is certain.
“In your program the maximum compensation covering the first layer of losses is 10 million dollars. Each enterprise that wants to join this fund must voluntarily pay 2% in premiums — 200 thousand dollars. The rest has to be co‑financed by 1% VAT — that is 1,2 billion dollars. And partners will add something; you estimate maybe 2 billion, it seems.
Now all those willing are starting to enter this fund, paying 2%. What capacity will ultimately be collected so that everyone who suffered losses can count on maximum compensation?
Of course, the question immediately arises: do we trust the state? That this queue will not be like now at the ECA (Export Credit Agency), where there are 600 applications but only about 200 reviewed. It’s unclear in what order they will be processed and how quickly. So whether your program will take off is a huge question,” Yuzhanina added.
“And generally raising VAT is a rescue in case of a resource shortfall for the Armed Forces. Forget about this wartime risk insurance fund,” she cut in.
The need to raise VAT puts deputies in a moral dilemma, MP Yaroslav Zhelezniak noted.
MP Yaroslav Zhelezniak
“In fact we would have to raise a tax so that all citizens (because everyone pays VAT one way or another) would pay a given business for rebuilding. Right?”
“It pains me to watch businesses being shelled now. But my mother is from Mariupol, where our entire business remained — occupied and destroyed — and she asked why the state compensates one business and not another. It’s an absolutely logical question from people in occupied territories.”
“Although in my head I understand that if we do not help business now, the VAT gap will just grow. This is a moral dilemma that the government will put before MPs,” Zhelezniak said.
Former Naftogaz head Andrii Koboliev believes demanding concessional lending from the state without insurance makes no sense. At the same time, he assures, the presence of insurance makes it possible to attract funds for expansion.
Andrii Koboliev, former head of Naftogaz, founder of Eneii
“From my simple perspective, if we can provide 1 billion and partners give us three to four [times that], for all of us that’s the best option. Which tax we will take that billion from can be debated. But the idea that partners should give us something for nothing hasn’t worked for a long time,” Koboliev said.
Ukrainian entrepreneur and founder of the trade and production association Textile‑Kontakt Oleksandr Sokolovskyi said many business representatives generally support the government’s proposal. “It may not please everyone, but if we do nothing, we’re all done,” the entrepreneur briefly summed up.
Oleksandr Sokolovskyi, Ukrainian entrepreneur, founder of the trade and production association Textile‑Kontakt.
An alternative to raising VAT could be introducing an import levy, suggests MP and Deputy Chair of the Verkhovna Rada Committee on Economic Development Dmytro Kysylevskyi.
“The government already did this in 2014. Then it simply imposed 5% on all imports.
Now we could separate critical from non‑critical imports. We would reach an amount likely comparable to or even greater than that VAT percentage. And this would address two problems at once — the trade balance and filling the fund we’re discussing,” the MP proposed.
Dmytro Kysylevskyi, MP, Deputy Chair of the Verkhovna Rada Committee on Economic Development
He also reminded the audience that there are draft laws ready on tax‑based investment compensation. “When the state has no money, it tells the enterprise: ‘Friends, rebuild, start paying taxes, and we will return part of the taxes you begin to pay when you recover as compensation for your investments. Maybe you’ll find funds yourselves somewhere.’ This structure exists in EU countries; that’s how they attract our entrepreneurs. But unfortunately, so far the IMF doesn’t understand that rockets are hitting us and we need to restore enterprises. So our task is to convince the IMF and the next day pass the bill in its second reading and start using it,” Kysylevskyi added.
“You can debate whether a one percentage point increase in VAT is the ideal mechanism for raising the necessary financial resources. Although I don’t see better options today,” said NBU First Deputy Governor Serhii Nykolaichuk. “Of course, raising VAT has many drawbacks. But there are no perfect resources, and it’s better to move forward now than do nothing.”
Oleksandr Kravchenko, Minister of Economy and Environment of Ukraine
“Don’t like one percentage point of VAT? Fine. What’s the alternative?” summarized this part of the discussion Minister Oleksandr Kravchenko. “When we talk about one percentage point of VAT — it’s a lever that raises a lot of additional funding — donor and private.”},{
“Let it not be 1% VAT but something else. We can significantly reduce this state capital, but then that lever will be much smaller. Will we then be able to make a program adequate to the challenges the economy faces?”
“We are in active discussions with many international partners. It’s a strong argument when we say we are ready to put our own money in. That works much more effectively than simply saying: ‘Give us 4 billion and we’ll distribute your money in compensations.’”
The minister said they will not create a new agency for the wartime risk fund. He believes the best option is to use the Export Credit Agency with corresponding strengthening of its corporate governance and transparency so it can be a platform to entrust large compensation sums.
“I fully agree with you; the likelihood of success is low and resistance is strong. But here we ask for your support because we really want to seriously support the Ukrainian economy and Ukrainian business. We are ready to discuss any options, but so far this is the most effective one we see that could work relatively quickly and be adequate to the challenges businesses face.
But our window is very short. Let’s try to find a solution that will give businesses at least some element of support as we enter this winter with these challenges,” the minister said.
Oleksandr Kravchenko, Minister of Economy and Environment of Ukraine
The state can help business not only with money
What the government should have done for business throughout the war — or at least do as soon as possible — is create a single mechanism for recording losses, says Tetiana Ostrikova, member of the Supervisory Board of JSC AltBank and the All‑Ukrainian Public Organization “Association of Lawyers of Ukraine.” She believes this would greatly simplify life for entrepreneurs who currently lack a clear algorithm of action.
“When a strike happens you have to think how to put out the fire while firefighters cannot join because of the alert, what to do with employees, where to get money, how to secure financing, restore assortment, what to do with logistics, where to get a new warehouse. At the same time you must collect five hundred documents from various state bodies,” Ostrikova complained.
Tetiana Ostrikova, member of the Supervisory Board of JSC AltBank, board member of the All‑Ukrainian Public Organization “Association of Lawyers of Ukraine”
“Can’t the state create a single window where you file an application and there will be the State Emergency Service conclusion, a fire report, a criminal investigation record, a Chamber of Commerce conclusion confirming force majeure, inspection reports from local authorities?...
In June of 25 the premises of our offices and bank were hit, and the inspection report from the local authority, which is necessary among all documents for any submission — to the tax office or the Chamber of Commerce — we received a year later — in July of 26!” Tetiana Ostrikova says.
She also called to remove from the Tax Code the clause 32.1 of the transitional provisions requiring the Chamber of Commerce to confirm force majeure circumstances when goods are destroyed as a result of enemy fire.
“If there is a State Emergency Service conclusion about a fire and a report, if there is an extract from the criminal proceedings of the SBU or police that this happened during a massive missile attack on Kyiv — how should the Chamber of Commerce still confirm that these are force majeure circumstances? Why does the Chamber record the fact of a strike in Ukraine? And without this I cannot write off goods without paying VAT on destroyed goods.
There are contractual certificates. If a strike occurred and I did not fulfill obligations to my counterparty, of course the Chamber of Commerce should confirm that. But the Tax Code norm says that if your goods or fixed assets were destroyed during hostilities then, for some reason, the Chamber of Commerce must confirm the hostilities. What logic did deputies have when they wrote this norm? Why is an extract from the criminal case register not enough? Why is a State Emergency Service act insufficient? Finally, public media reports and Ministry of Defense statements. I don’t understand why businesses must also do this work,” the Supervisory Board member of JSC AltBank said.
She also pointed out the problem with restoring lost documents — for Kyiv and the region the period is 90 days. The transitional provisions contain a norm saying that in case of document loss in combat zones they do not need to be restored, but the capital and region are not included.
Tetiana Ostrikova
Ostrikova also believes it is necessary to simplify customs control to avoid traffic congestion at border checkpoints or logistic terminals.
“Our customs officers go around and look for markings on every unit of goods. We live in a war, yet we act as if it is peacetime and must comply with every legal norm and then tell how resilient we are. That can’t be. We are at a point where we have to choose — ‘lights or go.’ Vehicles must leave these checkpoints and logistic terminals,” Ostrikova noted.
She also criticized the inertia in developing an effective legal mechanism for compensating damages.
“Today you can sue the aggressor; if you are a business you sue in the Commercial Court of Kyiv. You will get a judgment for billions of hryvnias and hundreds of millions of dollars in damages. But what will you do with it? You won’t enforce it in Ukraine because there is nothing from which to collect those damages.
Abroad there is practice where companies attempted to recognize and enforce such judgments abroad. But unfortunately, or fortunately, in international law states have immunity. Our Supreme Court in 22 deprived the aggressor state of immunity for Ukrainian courts. But in no other country, including EU countries where Russian assets are frozen, does that immunity disappear. You won’t have that judgment recognized or enforced against the aggressor state abroad.
And the mechanism proposed by the International Registry of Damage does not work today. The convention has not been ratified, and ratification by 25 countries may take years. What assets will fill the fund that will then compensate Epicenter, Rozetka, Novus, Varus, farmers, banks and others? Today there is no source of such assets.
There are so many well‑known international lawyers in the country — why hasn’t the state gathered them to develop on a professional level a legal mechanism for suing, for example, the aggressor’s satellites, state enterprises, defense industry companies, or pursuing commercial arbitration mechanisms? Today there is no legal mechanism to recover damages from the aggressor. In five years of full‑scale war no one has offered business such a mechanism,” Ostrikova said.
MP and member of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy Nina Yuzhanina in turn outlined a set of important steps the government can take now to help business. For example, introduce a flexible regime for deferring tax payment deadlines and offer it to affected businesses in Kyiv and the region.
Nina Yuzhanina, Member of Parliament, member of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy
“We can consider who and how to grant the cash method of VAT accounting, which producers, which chains, what to do with VAT on lost goods. We don’t have that deep analysis, so we are unable to tell business what we can do today,” Nina Yuzhanina said.
In her view it is time to implement profit tax relief for damaged businesses modeled on industrial parks or the Diia.City special regime.
“When adopting the recent changes on industrial parks I proposed adding in the list, separated by a comma, ‘enterprises affected by attacks’; to clearly define criteria and allow them, while there are no loans, to recover using their current funds.
Because all state programs, even wartime risk insurance, if they exist, will start from 1 January next year. And all previous losses will not be included in that program. These will be new losses,” Yuzhanina noted.
Overall, she stated the lack of coordinated work between the executive and legislative branches to understand who is actually doing what. This theme surfaced several times during the nearly two‑hour discussion in different interpretations. For example, Andrii Dligach emphasized that the country still lacks a coordinated economic policy and an economic headquarters to resolve business and economic problems in general. Individual actors can no longer solve separate issues on their own.
“For 4,5 years we’ve been fighting to survive, but we haven’t raised these acute questions about state support for business. We fought on our own. Whoever could get credit, whoever used their own resources, whoever could.
We built and invested, but the time has come when alone, without state support and concessional lending, we cannot cope. At least some financial instruments are needed to support ruined logistics and restore operations. Because we’re losing jobs and people — and that is the most painful part,” Epicenter K co‑founder Halyna hereha said on behalf of all businesses in the country, bringing the discussion to a close.
Halyna hereha, co‑owner and Chief Financial Officer of the Epicenter K group of companies (center)
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