IMF staff heading to Ukraine to review $8.1 billion loan program in coming weeks
IMF Mission to Ukraine: Loan Review and Economic Reform Requirements
By Andrea Shalal
Upcoming IMF Visit and Loan Review
WASHINGTON, May 14 (Reuters) - International Monetary Fund staff will visit Ukraine in coming weeks to review the country's progress in implementing economic reforms and broadening its tax base under an $8.1 billion loan, spokeswoman Julie Kozack said on Thursday.
Importance of Domestic Financing
Kozack told reporters it was critical that Ukraine mobilize more domestic financing to help cover its "very, very significant" financial needs in addition to the massive external support it has gotten from donors since Russia's full-scale invasion in February 2022.
Expanding the Tax Base and Formalizing the Economy
She said Ukrainian authorities needed to expand the country's tax base and move some of the informal economy, which is estimated to account for about 45% of gross domestic product, out of the shadows and into the formal economy.
Comprehensive Reforms and EU Membership Goals
Kozack noted that Ukraine had agreed under the terms of its latest IMF loan program to undertake comprehensive reforms, which also were necessary to meet Kyiv's goal of becoming a member of the European Union and unlock substantial external donor support.
Loan Program Review Timeline
The new IMF loan program, which was approved in February, is due for a review in June to determine whether Ukraine is meeting its targets.
Legislative Challenges and VAT Measures
Pending Legislation to Increase Tax Base
Ukraine has struggled to move forward with several pieces of legislation aimed at increasing its tax base, including one that would introduce a value-added tax on inexpensive parcels from abroad, and another to introduce VAT for self-employed individuals.
Discussion of VAT Measures
Kozack said the VAT measures would be discussed, but gave no details on the IMF's willingness to ease any conditions for the loan.
(Reporting by Andrea Shalal; additional reporting by David Lawder; editing by Paul Simao)
