The International Monetary Fund (IMF) calls on Ukraine to strengthen domestic revenue mobilization, implement financial restrictions and increase tax revenues. This was stated by Julia Kozak, director of the IMF’s Communications Department.
Answering questions about taxes and revenues, Kozak emphasized that the mobilization of domestic finances is a key component of the medium-term strategy within the framework of the Enhanced Financing Program (EFF) for Ukraine. This, she said, will help create space for critical spending, maintain financial buffers to respond to challenges, and restore the country’s fiscal and debt sustainability.
What does the IMF offer Ukraine?
The IMF and the Ukrainian authorities reached an agreement on the fifth revision of the four-year Enhanced Financing Program (EFF). After the mission in Kyiv, Ukraine will get access to the next tranche in the amount of 1.1 billion dollars.
At the same time, the IMF insists that Ukraine’s budget for next year should be formed taking into account savings and the ability to service debt obligations. For this, the foundation calls for increasing tax revenues, not only by reforming the tax system, but also by actively fighting tax evasion and the shadow economy. Special attention is also paid to the further reform of the customs service.
One of the IMF’s proposals is to increase the value added tax (VAT) in Ukraine by 2 percentage points.
The other day, the head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev, confirmed that at a meeting with representatives of the IMF, the Ministry of Finance, and the National Bank of Ukraine, the issue of increasing VAT was discussed as one of the sources of filling the budget.
“Difficult conversation. Obvious challenges. For the IMF, it is obvious that resources are not enough, even in the context of the draft law No. 11416-d on increasing taxes. Among additional sources, they offer an increase in VAT”,” Getmantsev wrote.
