European experience for environmental tax reform: State Tax Service cooperates with the GIZ 

Press service of the State Tax Service of Ukraine, published 13 July 2026 at 16:35 Chapter: News

Reforming administration of the environmental tax, new approaches to carbon dioxide emissions taxation and introduction of the best European practices became the main topics of working meeting of acting Head of the State Tax Service Lesya Karnauch and representatives of the German Society for International Cooperation (GIZ) chaired by the project Director "Support to Ukraine in the Implementation of Paris Agreement and Adaptation to Consequences of Climate Change in the Black Sea Region (PAABS)" and Ukrainian Climate Office (UCO) Daniela Goehler.

Parties, during the meeting, discussed implementation of provisions of the National Revenue Strategy until 2030, which provides for a change in the CO₂ emission taxation model. Instead of taxing actual emissions, it is suggested to switch to taxing volume of fossil fuel extraction and import.

“Environmental tax, which is administered by the State Tax Service, is a practical embodiment of the "polluter pays" principle. Today, our task is to make this system more effective, modern and compliant with the European standards, which is why expert support from international partners is very important for us” – noted acting Head of the State Tax Service.

According to Lesya Karnaukh, the State Tax Service supports approach that involves moderate rates while simultaneously expanding the tax base and fair distribution of the tax burden. And this principle applies not only to the taxation of CO₂ emissions, but also to the use of Ukraine's natural resources in general.

Meeting participants paid special attention to other areas of improving environmental taxation. In particular, the State Tax Service is participating in the preparation of a draft law on the National Greenhouse Gas Emissions Trading System, and is also working on amendments to the Tax Code regarding taxation of emissions from diffuse sources.

“Current legislation does not cover some significant sources of pollution, primarily methane emissions from pipeline transport and municipal waste landfills. Eliminating these gaps will make the environmental taxation system more fair and effective,” – Lesya Karnaukh emphasized.

Prospects for reviewing approaches to taxation of mining wastes were also discussed. Today, the environmental tax rate for their disposal remains minimal, although such waste can be a source of significant dust pollution. Improving legislation in this area will contribute to improving the environmental situation in industrial regions of Ukraine.

In total, for January – June 2026, the consolidated budget received 2.92 billion UAH of the environmental tax, which is 14.9 million UAH more than for the same period last year. Of this amount, 1.135 billion UAH was the environmental tax for carbon dioxide emissions from stationary sources of pollution, which is 3.7% higher than the figure for the first half of 2025.