Ukraine is considering bringing its largely underground adult-content industry into the formal economy through legalisation and taxation.
The proposal comes as Kyiv continues to face enormous financial demands from the war with Russia. Supporters argue that regulating an industry that already exists could create an additional source of tax revenue while reducing the scope for corruption and legal uncertainty.
Bill Already Cleared First Reading
The proposal is backed by Ukrainian lawmaker Yaroslav Zhelezniak, who chairs Parliament's finance committee and is a co-author of the bill.
The legislation passed its first reading in July and is now awaiting a second reading. If approved, it would seek to remove criminal penalties surrounding the production and distribution of legal adult content and bring related earnings into the tax system.
Up to $25 Million in Tax Revenue
Zhelezniak estimates that formalising and taxing the industry could generate as much as $25 million every year.
Although that amount represents only a small share of Ukraine's overall wartime financial requirements, supporters say even additional revenue streams could help purchase military equipment.
The estimate has been linked to the possibility of financing approximately 30,000 drones, highlighting how the proposal is being presented as part of Ukraine's broader effort to strengthen domestic war funding.
Legal Contradiction at the Centre of Debate
Under Ukraine's existing laws, the production and distribution of pornography remain criminal offences and can carry prison sentences of up to seven years.
At the same time, tax authorities have increasingly sought declarations and payments from people earning money through online adult-content platforms. Lawmakers supporting reform argue that this creates a contradiction: creators can face scrutiny for failing to declare income, while declaring the income may expose them to questions over activity that remains illegal.
Online Industry Has Expanded
Figures cited in reports indicate that Ukraine has a significant online adult-content economy.
According to data from OnlyFans' parent company cited by the Wall Street Journal, around 7,900 Ukrainians earned more than $131 million on the platform in 2023.
Supporters of the proposed reform say formalising such earnings could allow the government to collect taxes instead of leaving the activity in a largely unregulated environment.
Corruption Concerns Add Pressure
The debate also comes amid allegations of corruption connected with the underground industry.
Reports citing Ukraine's prosecutor's office say authorities have uncovered cases involving alleged bribes paid to officials in several regions. Reform advocates argue that clearer rules could reduce opportunities for illicit payments and allow law-enforcement agencies to concentrate on more serious wartime priorities.
Legalisation Still Not Final
Despite the international attention surrounding the proposal, Ukraine has not yet legalised pornography.
The bill still needs to clear another parliamentary stage before it can become law. Until then, the existing legal restrictions remain in place.
The debate reflects a broader wartime question for Kyiv: whether an already established but largely underground economic sector should be regulated and taxed to generate additional revenue for the country.
