Mandatory government bonds: Getmantsev’s plan for a 7% deduction of citizens’ income
The proposal to introduce mandatory purchase of war bonds by the public at a rate of 7% of taxable income, based on the experience of Israel in the 1970s, is aimed at finding additional sources of financing in wartime conditions.
War bonds of Ukraine
Initiative for the forced placement of government bonds
The head of the parliamentary committee on financial and tax policy initiated a discussion on the introduction of a system of compulsory purchase of government bonds. In his telegram channel, Daniil Getmantsev presented the concept of involving banking institutions, companies and individuals in the process of purchasing government bonds.
Current bond yield
According to data for October, the average profitability of hryvnia bonds reached 15.6%, which exceeds expectations rates of inflation and devaluation. Individuals receive an additional advantage due to exemption from personal income tax and military duty.
Israeli experience of military loans
An example is the practice of Israel in the 1970s, where a compulsory military loan program was implemented :
- Mandatory deduction of 7% of taxable income for the purchase of war bonds
- Fixed return of 5% without tax deductions
- Indexation of the principal amount according to the consumer price index
- Repayment of 1970 loans was planned for 1986 in twelve payments
- Interest payments were made every 3 years since 1977
Prospects for implementation
The parliamentarian emphasizes the need for broad discussion of this initiative. It is assumed that the system will function exclusively during the war period, and the funds raised will be used for defense needs. At the same time, the issue of mandatory participation of state banks in the purchase of war bonds according to individual plans of the Ministry of Finance and the NBU is being considered.
Economic indicators
In the first ten months of this year, tax revenues exceeded targets by UAH 67 billion. Work is underway to find additional domestic sources of financing, including measures to combat the shadow economy and corruption.
Glossary
- Government bonds - Domestic government loan bonds, government securities
- NBU - National Bank of Ukraine, the central bank of the country
- Personal Income Tax - Personal Income Tax
- Daniil Getmantsev - Head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy
- Ministry of Finance - Ministry of Finance of Ukraine, chief body in the system of central executive authorities for financial policy
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Discussion of the topic – Mandatory government bonds: Getmantsev’s plan for a 7% deduction of citizens’ income
Analysis of the initiative of the head of the Verkhovna Rada financial committee for the mandatory purchase of government bonds by the population in the amount of 7% of taxable income
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Giovanni
Interesting proposal for government bonds. 7% of income is a fairly gentle amount, given the martial law. In Italy, such an experience occurred after WW2, which helped restore the economy. 💰
Sophie
I agree with Giovanni. The Israeli experience is indicative - they were able to build a strong economy in conditions of constant threat. I think this is a smart move to support the army. 🇮🇱
Klaus
A yield of 15.6% sounds tempting, especially without personal income tax. Can be seen as an investment in the future of the country. I have some experience with government bonds, and I consider it a reliable instrument. 📈
Herbert
What nonsense! Again they want to get into the pockets of ordinary people. None of your bonds will help, you will only lose money in vain. In a crisis, you need to save cash and not play these financial games! 😤
Marie
Herbert, but this is not a game, but support for defense capabilities. Sophie correctly noted about Israel - they have such a system. 🤝
Giovanni
Klaus brings up a good point about profitability. Plus, indexation for inflation is a real protection of savings. I would invest. 💡
Sophie
Herbert, no one talks about games. This is a targeted loan for specific needs. Moreover, with a guaranteed return above inflation! 📊
Klaus
Marie is right, the main thing here is the goal. War bonds have always been an effective resource mobilization tool. History confirms this. ⚔️