Parcel tax: Can controversial changes be pushed through ahead of difficult winter?
On Tuesday, September 15, the Verkhovna Rada was due to make its fourth attempt to pass a tax on parcels. However, following a preliminary vote count and the scandal involving the prosecutor general the day before, the bill was pulled from the agenda at the last minute. But there are no plans to drop the bill – they are waiting for a more favourable moment while seeking votes for the unpopular measure.
On September 10, discussion of the initiative at a meeting of the relevant committee nearly turned into a scandal. Maksym Buzhanskyi publicly refused to vote in parliament for the initiative with an added PEP amendment, while Danylo Hetmantsev called the government’s attempt to push PEP provisions into the parcel bill "an experiment with a predetermined outcome" and accused the government of applying pressure by targeting personal interests. Journalist Oleksandr Kramarenko described the committee meeting as "economic-lobbying stand-up."
Business Censor examined how much the budget will actually receive, what is wrong with the promised benefit for service members, how PEP has reappeared in the "parcel" bill, and why a parallel shadow channel worth $1 billion a year remains untouched.
Three failures in four months
- On May 26, draft law No. 12360, which grew out of two initiatives by Hetmantsev registered back in January 2025, received only 127 votes out of the 226 required – the first setback in a string of failures.
- On September 1, there were two failures at once: amendments to the Customs Code No. 15460 received only 194 votes, while amendments to the Tax Code No. 15112-d received 198 out of the required 226.
- The vote was tied to the third IMF tranche of $0.7 billion and the second tranche of EU macro-financial assistance worth EUR 3.7 billion. President Volodymyr Zelenskyy stressed this point in his criticism of lawmakers over the failed vote:
"Today, the Verkhovna Rada failed to pass three laws that could have brought Ukraine more than $4 billion. Two more laws from the IMF programme also failed to pass. This is not money for the government or the opposition," he said on September 1.
The committee has cleared a version without the amendment: does it stand a chance?
On September 7, the government submitted a new version of the tax-related part – draft law No. 16051, replacing the unsuccessful No. 15112-d and included in it a new, stricter version of the provision on financial monitoring of former officials (PEPs, politically exposed persons).
In response, the Rada registered alternative draft law No. 16051-1, authored by Danylo Hetmantsev, head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, without this provision.
On September 10, the committee endorsed Hetmantsev’s alternative without the PEP provision for consideration in the chamber, along with Customs Code draft law No. 15460. During the meeting, the committee chair described the bill’s chances of passing with the amendments as "an experiment with a predetermined outcome."
Included on the agenda for Tuesday, September 15, the document is being proposed to lawmakers for adoption both at first reading and as a whole.
At the same time, according to an estimate by MP Nina Yuzhanina, who headed the Verkhovna Rada Committee on Tax and Customs Policy in the previous convocation, even if it is adopted, the budget will receive no more than UAH 10 billion.
For comparison, the MP notes that more than UAH 20 billion has already been spent on the National Cashback programme alone. Moreover, the vote is taking place as Ukrainians prepare for a difficult winter, when parcels from abroad containing power and lighting supplies are becoming an important factor in survival.
However, as investigative journalist Yevhen Plinskyi writes, this is currently not about taxation as such. The main purpose of the initiative is, in effect, to block the delivery of orders from abroad. The logic is that Ukrainians will not wait several months for a parcel and will therefore buy the items they need from domestic marketplaces at inflated prices. To that end, a chat group with the provisional name "Chat 18" was created, bringing together representatives of Ukraine’s non-food retail sector. They are, in fact, the main lobbyists behind this law.
"Retail clearly understands that once the ‘VAT from UAH 0’ provision takes effect on January 1, 2027, no agreement with Chinese marketplaces as tax agents will be possible. It cannot be organised, and the Finance Ministry acknowledges this. Not publicly, for now. But the law will already be in force. That is why the entire burden of tax administration will fall on customs and postal operators, leading to an accumulation of parcels in warehouses, with the resulting security consequences, long queues for value verification, tax calculation, payment and so on," Plinskyi explains.
According to the plan of "Chat 18," he notes, Ukrainian consumers are expected to independently conclude that it is easier to buy the same product on a Ukrainian marketplace at a slightly higher price than wait for it to arrive from China.
"Cynical? Yes. But very business-like," the journalist stresses.
Fighting splitting versus the hard data
The main argument of the law’s supporters is the fight against splitting commercial consignments into parcels disguised as personal shipments. Speaking to Business Censor, Yuzhanina says she filed a parliamentary inquiry with the Customs Service requesting a detailed breakdown of parcels for 2025. According to the data provided by customs officials, 75 million parcels worth up to EUR 150 arrived in Ukraine last year, and 83% of them were worth up to EUR 50.
"Tell me, where is the splitting of commercial consignments here? What is the threshold for these goods, and what category do they fall into exactly?" Yuzhanina asks.
At the same time, she says, the lion’s share of low-cost parcels arrived during the autumn and winter blackout period. In other words, people were apparently buying power banks, light bulbs and other necessary household items.
Will service members have to pay extra for their own equipment?
Another issue raised by Yuzhanina is the VAT exemption for goods intended for security and defence needs. In the new version, the provision has formally been expanded by a few words: the benefit still applies only to a narrow list of categories that were already exempt upon import. The procedure for refunding paid VAT is yet to be established by the Cabinet of Ministers.
This issue is extremely important because, in practice, service members have often bought and continue to buy equipment for themselves on European marketplaces using their own money.
"In wartime, an international parcel is far from always an ordinary purchase. It may be a battery, an antenna, a drone controller, a tourniquet or another component that a service member or volunteer finds wherever it is available, buys with their own money and sends to where it is needed tomorrow," the Association of Entrepreneurs and Veterans of Ukraine emphasised in an appeal to the Verkhovna Rada.
Lawmakers have also drawn attention to the issue of supplying service members in this context:
"We have not raised military pay for almost five years, and the budget will not provide for an increase. Yet we want to add 20–30% to the cost of equipment they buy themselves? That is unfair," Yuzhanina says.
Although this issue is constantly raised during discussions, it remains unresolved.
Shutting down a legal channel creates opportunities for the shadow economy: hidden risks
Abolishing the exemption for private shipments will spur the development of illegal smuggling channels, Yuzhanina warns. In particular, she points to the risk of expanding schemes involving "buses," in which contraband is brought in through small consignments disguised as legitimate transport.
"If you want to shut down the one legal, transparent mechanism people have been using, you have not defeated the shadow economy. You are now creating opportunities for large-scale shadow shipments by van and other shadow schemes. All of this will transit through other countries," she points out.
At the same time, the infrastructure for shadow schemes has not disappeared, while a parallel channel for commercial consignments has long operated openly. Oleksandr Sokolovskyi, president of the Ukrainian Association of Light Industry Employers, Ukrlegprom, described how so-called cargo companies operate in a Facebook post: an entrepreneur orders fabrics or clothing from manufacturers in Turkey and China; the cargo company handles transportation and customs procedures; and payment is made in cash based on the weight of the shipment, for example, $1.60 per kilogram of fabric. No primary documents establishing the origin of the goods are provided. The goods are then sold at markets and in shops through individual entrepreneurs, who do not require documents confirming their origin.
According to Sokolovskyi’s calculations, a legal importer spends at least 37% of the purchase price on customs clearance and delivery, while those operating through cargo companies spend 17–18%. The shadow market’s share of the light industry sector has risen from 60–65% to 80–90% in recent years, while the budget loses approximately $1 billion annually in VAT and customs duties alone.
At the same time, he notes, these companies do not hide: they advertise openly, keep the same addresses and telephone numbers for years, and take part in industry exhibitions with stands in the most expensive locations. According to Sokolovskyi, even his own clients are switching to cargo companies: "Everything you offer is good and convenient, but we will order through a cargo company: it is cheaper for us, even though the goods cannot be officially entered into the books."
Defer it until EU accession? What alternatives are there to the failed "parcel" proposals?
Yuzhanina does not dispute the rationale behind the reform. While she headed the parliamentary tax committee in the previous convocation, Ukraine negotiated with the EU on gradually lowering the threshold, which was then reduced from EUR 150 to EUR 100.
"Hetmantsev and Co., who were campaigning in the election, said they would repeal everything their predecessors had done. And they did – they restored the threshold to EUR 150," the MP recalls, explaining the essence of the current problem.
Now the same majority must vote to abolish entirely the threshold that it reinstated four years ago. The EU itself moved towards a zero threshold gradually, she notes: the VAT exemption for parcels worth up to EUR 22 was abolished in July 2021, while customs duties on consignments worth up to EUR 150 were introduced only in July 2026, through a separate decision of the Council of the EU. The entire transition took five years – despite the population’s purchasing power being incomparably higher than that of Ukrainians.
Yuzhanina proposed tying the entry into force of the changes not to the IMF’s quarterly requirements but to a specific stage of Ukraine’s accession to the EU. However, the authorities have rejected this position, proposing that lawmakers vote "either for it as it stands or not at all" instead of holding a discussion.
The arguments against introducing the changes now lie in the state of the economy. At the same committee meeting on September 10, Finance Minister Serhii Marchenko warned of the risk of delays in salaries and social payments, even under protected budget items, did not rule out "humanitarian financing" of the budget, and named hryvnia devaluation and inflation as possible consequences.
At the same time, Yuzhanina believes it is incorrect to link the state of the budget to this particular vote. She refers to the Accounting Chamber’s report on the implementation of the state budget in the first half of the year:
"Budget problems were recorded as early as the end of the first quarter of 2026. And to say that the failure to vote now is what has caused the budget to be in this condition is incorrect; it is untrue," she stresses.
According to her, "it appears that the authorities do not want to cut non-priority populist spending now and are instead fighting specifically for something that is socially harmful." At the same time, she puts the initiative’s chances this time at "50/50." It all depends on whether the authorities can find the necessary votes this time.
