Ukraine has significantly increased military taxes for its citizens, doubling the levy amid concerns that U.S. support for its defense against Russia might decrease under Donald Trump’s administration.
President Volodymyr Zelensky signed legislation on Thursday raising the military tax from 1.5% to 5%, effective December 1. This measure is expected to generate around $3.4 billion, with additional provisions to increase rental fees and tax banks' profits at a rate of 50%, according to Finance Minister Serhiy Marchenko. The revenue will support Ukraine's defense efforts in 2025.
The tax hike comes as President-elect Trump, set to take office in January, has repeatedly signaled a desire to reduce U.S. military aid to Ukraine. On the campaign trail, Trump emphasized ending the Russia-Ukraine conflict and criticized what he called excessive U.S. spending on foreign wars.
Trump recently appointed retired Army Lieutenant General Keith Kellogg as special envoy for Ukraine and Russia. Kellogg, who served as National Security Adviser to Mike Pence during Trump’s first term, has been a vocal advocate for a new approach to the conflict.
In May, Kellogg and former Trump aide Fred Fleitz released a policy proposal calling for a freeze in U.S. military aid unless Ukraine agreed to peace negotiations with Russia. The plan suggests freezing the conflict along existing front lines, leaving Russia in control of about 20% of Ukraine's territory. It emphasizes a ceasefire and negotiated settlement, with security guarantees for Ukraine in exchange for delaying its NATO membership.
The proposal also suggests partial sanctions relief for Russia to encourage diplomatic progress. However, it underscores continued U.S. support to ensure Moscow does not resume aggression after a ceasefire.
Trump praised Kellogg's appointment on Truth Social, describing him as a trusted ally from his first administration. Trump declared, "Together, we will secure PEACE THROUGH STRENGTH and Make America, and the World, SAFE AGAIN!"
It remains uncertain if Trump will fully adopt Kellogg’s plan to resolve the war, but the framework suggests a shift in U.S. policy that could significantly impact Ukraine’s strategy and financial needs.
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