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Automatically translated version. May contain inaccuracies compared to the original.
Recent months have shown that Russian missiles and drones target not only energy facilities and ports, but also logistics companies and data centers, factories, and transport infrastructure. The aim of such strikes is not a single business, but the economy as a whole: its ability to produce, supply, and fill the budget.
Justifying a new mechanism for compensating wartime losses, the Ministry of Economy 18 estimated in September that annual losses of businesses’ fixed assets due to the war “could amount to 4–10 billion dollars or more.” That is the figure the state is using in designing an insurance fund that is supposed to start operating in 2027. So the question is no longer whether the state should help entrepreneurs after strikes, but how to make that help fast, sufficient, and not undermine the tax base that will fund it.
The direct loss of property is only the first wave. It is followed by loans that must be serviced despite destroyed collateral, costs of urgent relocation of capacities, and—most painfully—loss of jobs. Epitsentr K co-founder Halyna Hereha 22 reported in September: “Just in the last month, when business has been hit especially hard, we lost 7000 jobs.”
The budget feels these losses too: every million in wages that disappears after a strike removes about 450 thousand hryvnias per month from the budget and social funds. Companies cannot restore production on their own, and banks will not be able to finance this need fully. Given this, the state must help businesses restore production processes and develop effective programs to do so.
What the state has already done
The starting point was a Cabinet resolution of 28 November 2025 No.1541. According to the Procedure it approved on 1 January 2026, two programs began operating: partial compensation for the value of destroyed or damaged property and partial compensation of insurance premiums under contracts insuring against war risks. Payments on behalf of the state are made by the Export Credit Agency (ECA). The total maximum amount of property compensation is 30 million hryvnias per legal entity for the entire program term, and for participation a firm pays a contribution of 0,5% of the total likely loss. When 90% of budget appropriations are used, the ECA stops accepting new applications.
From 22 September changes introduced by the Cabinet resolution of 17 September 2026 No.1157 are in effect. Kyiv region and Kyiv were included among territories of increased risk, and compensation was extended to property located on or passing through such territories in transit.
In addition, by resolution of 15 September No.1156 the government expanded the concessional loan program approved by the resolution of 29 April No.594. Now companies can receive up to 1 billion hryvnias with a compensation of 5,5 percentage points per year from the bank’s base rate, which cannot exceed 18% per year. Thus the borrower will pay at most 12,5% per year.
The direction is correct, but the scale does not match the problem. As of 17 September (almost nine months), the ECA approved 323 applications for property compensation totaling about 6,8 billion hryvnias, and only 39 enterprises received compensation of insurance premiums—over 56 million hryvnias in total.
The reason was explained on 29 September by Deputy Minister of Economy and Environment Yehor Perelyhin: “Today the cost of insurance coverage for war risks on the market reaches 5–15% of the insured sum.” The capacity of the insurance and reinsurance market, the Ministry of Economy estimates in a statement of 18 September, is “up to 1–1,5 [billion dollars],” and moreover it is impossible to insure in high-risk regions. That is, the market can cover only part of possible losses, and current programs will remain pilot unless funding is significantly increased.
Budget-2027: money not guaranteed
In the draft law on the state budget of Ukraine for 2027 the government provided 96 billion hryvnias to support the economy and business—45,7 billion hryvnias more than in 2026. Of that sum, 29 billion hryvnias are allocated to “Affordable loans 5–7–9%” and guarantees of the National Development Institution, 45 billion to housing provision under the “eOselya” program, 10,1 billion to the Innovation Development Fund (including for defense technologies), and 9,4 billion hryvnias to active entrepreneurship support programs.
However, the government’s statement of 16 September 2026 does not name a separate instrument that would help companies affected by strikes with working capital, so businesses will still have to rely on loans.
The biggest innovation is 58,7 billion hryvnias for insuring business against war risks and another 8,3 billion for protecting the fuel sector. These funds are to be the state’s contribution to a special fund “with a target volume of about 3–4 billion dollars”: “Approximately 1 billion dollars is planned to be provided from state financing, another 2–3 billion dollars—to be attracted from international partners.” The fund is to compensate losses up to 10 million dollars per legal entity, and a firm’s contribution will be 2% of the chosen coverage limit.
However, the state share will appear only if VAT is raised from 20 to 21% and excise taxes on fuel are increased. Prime Minister Serhiy Koretsky in an interview with TSN.Tyzhden 27 September explained: “We put this special fund as a separate line in the state budget, let’s say, a special account, this billion.” He added: “Unfortunately, there are no other sources.” According to analysts at Vox Ukraine, about 117,3 billion hryvnias of planned tax revenues depend on laws that have not yet been adopted.
Business evaluates this idea ambiguously. The founder of the trade and manufacturing association Textil-Contact, Oleksandr Sokolovskyi 22 September supported the government’s proposal: “It may not please everyone, but if we do nothing, it’s the end for all of us.” In turn, Nova Poshta co-owner Volodymyr Popereushniuk, as RBC-Ukraine reported on 30 September, compared raising taxes to support business to extinguishing a fire with gasoline. Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Danylo Hetmantsev sees an alternative in something else: “The reserve and resource we have is detaxation.”
The essence of the objections is clear: the proposed assistance would be financed by a tax paid by all consumers and the legal sector. Every additional percentage point of VAT increases the incentive to operate in the shadow economy, so the state risks losing part of the planned resource before it even reaches the budget. That is why an alternative—an import levy—has entered the discussion.
Import levy
Deputy Chair of the Verkhovna Rada Committee on Economic Development Dmytro Kysylevskyi 22 September proposed repeating a past experience: “The government already did this in 2014. Then it simply introduced 5% on all imports. Now you can separate critical and noncritical imports.”
However, this idea has at least three flaws. The first is legal. The reference to the precedent is inaccurate: Ukraine introduced an additional levy on 25 February 2015 at rates of 10% on agricultural and 5% on industrial goods. The justification was Article XII of GATT 1994 and the Understanding on the provisions of the General Agreement on Tariffs and Trade of 1994 regarding the balance of payments. These WTO agreement provisions allow, in case of balance-of-payments problems, temporarily introducing “additional import duties,” but require the state to enter consultations with the Committee on Balance-of-Payments Restrictions within four months. Ukraine held such consultations in 2015 and by the beginning of 2016 had completely abolished the levy.
Today it is much harder to justify a similar basis: according to the NBU data cited by Mind on 8 September, as of 1 September 2026 international reserves of Ukraine amounted to 48,66 billion dollars, which covers about four months of future imports, and that volume is sufficient to maintain stability in the foreign exchange market. Without justification of balance-of-payments problems, a new levy would contradict subparagraph “b” of paragraph 1 of Article II of GATT 1994, and regarding goods from the EU—also part 1 of Article 30 of the Association Agreement between Ukraine and the EU, which prohibits introducing new tariffs. Thus such a step would require negotiations with the EU and consultations in the WTO.
The second flaw is economic. The levy will make imported equipment, components, and building materials more expensive, without which it will be difficult for enterprises to restore production after a strike.
The third flaw is administrative. Dividing imports into “critical” and “noncritical” creates room for lobbying and manipulation of product classification, and any new surcharge at the border increases the profitability of underreporting customs value and smuggling.
So the import levy does not solve the problem, it shifts it to other payers. Attempts to obtain tax reliefs that business expected also failed.
Tax refusal
As MP Olga Vasylevska-Smahliuk reported on 2 October, the Ministry of Finance did not support three proposals from affected companies: deferral of tax payments without interest and without collateral, cancellation of scheduled audits, and extension of special rules for confirming tax reports without primary documents to enterprises that lost documents due to strikes outside active combat zones.
According to the ministry, “interest compensates the budget for the cost of delayed receipts, and collateral should protect the state from the risk of nonpayment.” This concerns interest at 120% per year of the NBU discount rate, which is charged on deferred and installment monetary obligations. The Finance Ministry explains refusal of audit suspension by referencing “limits on audits, risks of tax evasion and Ukraine’s obligations to international partners, including the International Monetary Fund.”
But the fiscal logic here is short-sighted. A company that has just lost a warehouse will not become more solvent because of accrued interest; it will only lay off workers faster, and the budget will receive zero instead of a deferred tax. A sensible compromise is not a blanket exemption, but a clearly defined regime for verified victims: a short deferral without interest tied to preserving jobs, and audits based on risk assessment instead of a blanket moratorium. Meanwhile the expert community has proposed a broader package of measures.
What experts propose
The most substantive package was developed by the Economic Expert Platform. Eleven analytical centers signed the appeal to the prime minister, the minister of economy, and the minister of finance. The key idea is to replace direct compensation of all losses with a multilayer risk-sharing arrangement. The first layer covers the business deductible (5–10% of asset value), the second—commercial insurance, the third—reinsurance, and the fourth—the state guarantee of maximum loss (stop-loss). Parliament also recognizes businesses’ willingness to share risk: Danylo Hetmantsev 4 October noted that “entrepreneurs speak about the need for greater insurance coverage and are ready to participate in financing the relevant mechanisms together with the state.”
The economic logic of this model is convincing. According to the authors’ calculations, direct compensation would cost the budget about 78 billion hryvnias per year, whereas the multilayer model—8–14 billion hryvnias. The rest of the resources would come from insurance premiums, international reinsurance, and bank capital under state guarantees, and the model provides “up to 1,59 hryvnias of insurance coverage for each 1 hryvnias of budgetary resource.”
The package also includes a claims-liquidity facility of about 3 billion hryvnias with a median payout time of 30 days, a single registry of damages with fixation within 72 hours, and loans at 5–7% with principal repayment deferral for 12–18 months. These proposals, together with government decisions, make it possible to formulate the principles on which state support should be based.
Eight principles of effective support
First: speed is more important than size. Compensation in a year only saves the balance sheet; money in a month saves the company itself. Advance payments based on preliminary damage assessments should be launched before the ECA completes a full expert examination.
Second: insurance instead of direct compensation of losses. It makes sense for the state to take on the top, catastrophic layer of risk, and pass the rest through the ECA to the market, international reinsurers, and financial institutions, including the Multilateral Investment Guarantee Agency (MIGA).
Third: fund support should be financed through detaxation, not new taxes. The resource hidden in smuggling, “gray” imports, and wages “in envelopes” gives the state more room to maneuver than raising rates, which hurts compliant taxpayers.
Fourth: protect jobs, not just property. Temporary support for the wage fund tied to preserving employees and rapid re-employment of laid-off workers within commuting distance will cost less than losing skilled personnel and the tax revenue from their wages.
Fifth: one methodology for accounting losses. Today a company proves the same losses differently for the ECA, the tax service, the bank, and the insurer. A single state register of damages with standardized photo and video fixation will shorten timelines and reduce risks of abuse.
Sixth: air defense. The cheapest compensation is the one you didn’t have to pay. Protecting logistics and industrial clusters, dispersing stocks, and planning reserve routes together with the military in advance—not after the next strike—should be prioritized.
Seventh: critical supply chains. Fast financing should be directed first to these chains, as well as to warehousing and fuel infrastructure.
Eighth: assistance in exchange for companies’ commitments.
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The state has already acknowledged strikes on business as a systemic threat, not a series of isolated insurance cases. The next step is to turn one-off decisions into a permanent mechanism with predictable rules, fast payments, and a reliable funding source that does not shift the burden to compliant taxpayers.
In other words, state policy should move from a model of “compensate what was destroyed” to a model of “preserve the ability to operate”: property insurance should be supplemented with working capital financing, critical infrastructure reservation, and quick advance payments.
An entrepreneur who clears the debris after a strike and reopens the next morning is not asking for charity. He is asking for rules under which one can operate under fire. Whether he gets those rules will determine not only the fate of his business, but also the filling of the budget that lives on his taxes.
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