IMF approved a new tranche for Ukraine: conditions determined

IMF demands reforms: abolition of tax benefits and energy liberalization

Ukraine and the International Monetary Fund (IMF) have reached an expert agreement on the first review of the extended financing program, paving the way for receiving the second tranche of $690 million. The Fund’s main demands concern the reform of the tax system and liberalization in the energy sector.

The IMF mission, concluding its regular visit to Ukraine, noted that despite delays in implementing structural reforms, both parties agreed to compensate for the backlog with new political commitments. Mission Head Gavin Gray emphasized the importance of mobilizing additional domestic resources, which becomes a priority issue against the backdrop of Ukraine’s significant defense expenditures.

Among the key steps expected by the IMF from the Ukrainian authorities are the abolition of tax benefits on parcels, control of transfer pricing, and the reform of the simplified tax system. The Fund also emphasizes institutional changes in the Bureau of Economic Security and the State Customs Service for more effective tax evasion combating.

The IMF paid special attention to the energy sector. According to the Fund, current tariffs for the population adversely affect state companies. The government is working on a roadmap for the gradual liberalization of the market, which includes tariff adjustments after the preparation of social protection mechanisms. Enhancing the independence of the National Commission regulating the energy sector is also named among the priorities.

As part of previous agreements, Ukraine has already committed to canceling by 2027 the VAT exemption for individual entrepreneurs and tax benefits for import parcels worth less than 150 euros.