The IMF has approved a new tranche for Ukraine: what conditions has the Fund set?
This was reported by "Zaliznyy Nardep", citing an IMF press release.
The Fund’s document notes that Ukraine continues to implement the cooperation programme, although some structural commitments have been implemented with delays and one of the planned targets has not been met. To keep the programme on track, Ukraine must continue a series of reforms in the financial, energy and anti-corruption sectors.
What changes does the IMF expect?
Among the requirements in the area of public finances are control of budget expenditure, an increase in domestic revenue and improved tax administration. Changes are also envisaged regarding the taxation of international parcels. In particular, this involves abolishing the VAT exemption for certain shipments to reduce opportunities for abuse. The IMF is paying particular attention to reforming the simplified taxation system. Ukraine must introduce mechanisms to prevent the artificial division of businesses and the use of sole traders to conceal employment relationships. Other areas of focus include changes to the Economic Security Bureau and the customs service.
Tariffs and energy
In the energy sector, Ukraine must prepare a plan for a gradual transition to market-based conditions for the industry. This involves reforming the system of special obligations, which keeps tariffs for the population below market levels. At the same time, the IMF emphasises the need to establish support mechanisms for socially vulnerable citizens in the event of changes to tariff policy.
Anti-corruption reforms
Other points in the programme include further strengthening the e-declaration system, as well as reforming the management of state-owned enterprises and banks. In particular, this concerns the transparent selection of managers, the role of independent supervisory boards, and the accountability of the public sector. Ukraine must also fulfil commitments that were carried over due to delays in previous periods.
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