The Ukrainian authorities have agreed to new funding conditions and the implementation of tax reforms necessary to receive support from the International Monetary Fund (IMF). According to Bloomberg, Ukraine will need to meet a number of requirements to obtain a credit package of about $8 billion.
Among the key conditions are the elimination of tax benefits for businesses and households, as well as accelerating the fight against tax evasion. In particular, there are plans to introduce a value-added tax (VAT) for individual entrepreneurs (FOP) who declare an annual income exceeding 1 million hryvnias.
Requirements and consequences
One of the main requirements is the adoption of a balanced budget for the next year. The government of Ukraine has also committed to abolish benefits on imported parcels from abroad, which are currently exempt from duties on goods valued up to 150 euros.
"This agreement has become a catalyst for receiving extensive external support," said IMF mission head Gavin Gray. He also added that Ukraine must be ready to implement all measures that will ensure macroeconomic stability.
Among the decisions that will be subject to approval are changes to VAT payment criteria, as well as closing loopholes in customs control. Members of parliament expect challenging phases in the process of adopting new regulations, as the previous funding program contained significant amounts that are now decreasing in light of new realities.
Situation with frozen assets
Currently, the fate of the agreement with the IMF also depends on whether the European Union advances with its plan for the use of frozen assets of the Russian Central Bank. Central authorities are calling for constructive dialogue to provide the necessary support for the economy in difficult times.
Experts note that while the amount of funding is less than expected, it may become a key to obtaining other international financial resources needed for the recovery of Ukraine's economy.
