Ukraine plans to tax pornography to fund the war effort

Ukraine’s parliament is considering a bill to decriminalize the country’s porn industry and route the resulting tax revenue into military spending against Russia. For high-risk payment providers, the useful part is not the headline-grabbing politics; it is that a large adult-content flow is being discussed in the open, with explicit tax treatment and enforcement pressure already shaping how the business operates.

1. The bill was introduced by lawmaker Yaroslav Zhelezniak and has already passed its first reading in parliament in July. Zhelezniak, who chairs the Ukrainian parliament’s finance committee, told the Wall Street Journal that legalizing the industry could generate an estimated US$ 25 million in taxes, which he said would be enough for 30,000 new drones for the armed forces.
2. Ukraine currently treats all stages of porn production as criminal activity, including production, possession, and distribution. That is the backdrop for the proposal: bring the activity into the tax net, stop treating it purely as a criminal matter, and use the receipts to help finance wartime spending.
3. According to data from Fenix International, which controls the Onlyfans adult-content platform and was reviewed by the WSJ, 7,900 Ukrainians earned more than US$ 131 million in 2023 alone. For PSPs and acquirers, that is the operationally relevant number: there is already meaningful transaction volume in the market, whether or not the law catches up with it.
4. The current enforcement model described by models and reported by the newspaper includes police raids, evidence collection, and requests for payments to avoid criminal cases. In practice, that means the sector is not just a legal-risk issue; it is also a cash-flow and settlement-risk issue, with pressure coming from local authorities and police as well as from statute.
5. One of the models interviewed, Svitlana Dvornikova, filed a petition that was later published by President Volodymyr Zelensky. In it, she described herself as a “conscientious taxpayer” and said the government should be “grateful” for nearly US$ 900,000 in taxes she paid, which she equated to “hundreds of Russians killed on the front.” The petition gathered more than 25,000 signatures in one week.

For adult PSPs, the real question is not whether the industry exists in Ukraine; it does. The question is whether a legalized, taxed version of it becomes a cleaner underwriting story than the current setup, where the same revenue can be treated as taxable business activity, a criminal offense, or both depending on who is looking.