The Wall Street Journal: Ukrainian Parliament Advances Legalization of the Sex Industry to Fund Military Expenses
The Wall Street Journal reports that the Ukrainian parliament is advancing a proposal to legalize the sex industry as a taxable sector to increase domestic wartime revenue. The bill, co-drafted by Yaroslav Zhelezniak, a member of the parliament's finance committee and an opposition MP, passed its first reading in July and is awaiting a second reading. Under current laws, producing, possessing, and distributing pornography can still face up to seven years in prison.
Lawmakers estimate that taxing existing online adult content could generate up to $25 million annually. Zhelezniak stated that this amount is roughly enough to purchase 30,000 drones. He also noted that this is just a drop in the bucket of Kyiv's claimed annual defense needs of about $120 billion. He described the situation as a "mixed blessing": failing to pay taxes could lead to prosecution for tax evasion, while paying taxes would equate to self-incrimination for participating in still-illegal pornographic activities.
The tax base is derived from platform data, not mere speculation. Fenix International, the parent company of OnlyFans registered in the UK, provided figures to the Ukrainian tax authorities showing that around 7,900 Ukrainians earned over $131 million on the platform in 2023. Some models reportedly earn over $20,000 per month. The tax office has since begun contacting creators for tax collection. From 2020 to 2022, another estimate indicated that about 5,000 Ukrainians earned approximately $123 million on OnlyFans. In 2025, the platform is expected to pay about $1.6 million in taxes to the Ukrainian budget, an 18% year-on-year increase.
Individual cases highlight the contradictions. Svitlana Dvornikova, who lives near the front lines, travels to France or Spain every few weeks to rent villas for filming, claiming to have paid about 40 million hryvnias, approximately $900,000 in taxes, which she equates to about 100 military pickup trucks or 2,000 drones. She gathered 25,000 signatures on a petition to the president's website within a week, and Volodymyr Zelensky stated that the parliament would consider related legislation. Her case is reportedly on hold during the bill's debate. The first reading on July 14 received 231 votes; the previous case, bill No. 12191, only garnered 207 votes on May 28, failing to meet the 226-vote threshold. The new text also increases penalties for child pornography and the exploitation of minors.
Conservative societal views have led to the bill's failure twice before it was sent for a second reading. Supporters argue that the current ban has resulted in police corruption and wasted law enforcement resources: in the first nine months of 2025, nearly 1,500 criminal cases related to adult pornography were opened, a 13% year-on-year increase. About 15,000 workers operate under uncertain legal conditions, with some opting to film abroad and pay taxes to other countries.
In market terms, what is included in the tax return are subscriptions and tips already monetized on dollar platforms, while what is being sold is the criminal risk. The driving force is the war, which marks every verifiable foreign exchange income as military necessity. Funds are cleared from London platforms to the Kyiv treasury, then converted by lawmakers into drone units. Beneficiaries include the finance committee, which needs domestic tax narratives, and top creators who have already paid taxes; those under pressure are workers who may still be prosecuted under old laws, and the public that hears $25 million as a potential solution to a $120 billion shortfall. Taxation is based on data; military expenses are merely a conversion metric. Once the bill passes its second reading, money will shift from gray income to budget items.
Source: Public Information
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Zhelezniak has been advocating for decriminalization since around 2023; the war is not the starting point for this legislation but rather a talking point for its first reading. The comprehensive ban from the Soviet era has turned into a tax paradox after OnlyFans transformed Ukraine into a leading supplier on the platform: the state collects VAT while retaining a seven-year prison sentence. Fenix providing the tax office with a list of 7,900 people and $131 million effectively turns the roster of creators on foreign platforms into domestic law enforcement leads. Legalization aims to resolve the issue of "tax bills as evidence of crime," rather than creating a new industry out of thin air.
The capital path is short. Creators film in Mediterranean villas, dollars flow to UK companies, and then Kyiv taxes them based on residency. The $25 million is an imagined upper limit of existing income multiplied by the tax rate, not new factory investments. The drone conversion translates social controversy into frontline units: 30,000 corresponds to about 0.002 of the annual defense budget. The real fiscal logic is to reduce police protection fees for "porn studios" and case budgets, keeping gray foreign exchange under residents' tax numbers. Foreign aid remains the bulk; this bill is a self-funding sample for the parliament.
Comparisons need to be specific. The Netherlands and Germany have incorporated the sex industry into licensing and social security, trading it for municipal management rights; Eastern European countries like Estonia and Romania have long been suppliers for Western platforms without needing to use drone rhetoric to pass legislation. Ukraine's unique situation is the wartime tax base hunger layered over a criminal law still carrying a seven-year prison sentence. The New York Times noted the same contradiction in April 2025, and the Wall Street Journal upgraded the figures to military expenses in September 2026. The industry's position is in a patchwork phase of "first generating foreign exchange, then supplementing domestic law," not a Nordic-style industrial policy.
Structural judgments belong to regulatory changes. The mechanism is: cross-border platforms first complete pricing and settlement, and nation-states later claim resident income through criminal or tax laws. When war requires every dollar to declare its purpose, decriminalization shifts from a moral bill to a fiscal one. Whoever controls platform payment data can simultaneously issue tax bills and criminal cases. The parliament's second reading will determine whether this data will only enter the treasury or continue to be double-edged.