IMF Loan To Support Ukrainian Reform Efforts
The International Monetary Fund (IMF) has shown its support for recent fiscal reforms in Ukraine by approving a four-year funding plan.
The Executive Board of the IMF has now approved a four-year extended arrangement for Ukraine, worth about USD17.5bn, approved under the Fund’s exceptional access policy.
This program will replace the previous stand-by arrangement, which had been in place for about a year, during which time Ukraine has introduced various tax reforms, including tackling tax fraud, adopted more uniform – and therefore less abuse-prone – excise duties on fuel, raised excise duties on alcohol and tobacco, and closed value-added tax loopholes.
Compliance has been a major focus of the authorities’ efforts, with a generous amnesty launched for VAT and corporate tax debts. The Government has also sought to simply the corporate and personal income tax regimes. The Ukrainian Government hopes that these measures will encourage foreign investment, despite higher tax rates, and foster improved tax compliance. The IMF said that Ukraine has shown “strong resolve” and added that the new funding plan will enable the country to see through the necessary reforms.
