EP: MPs will be offered to abolish lifetime PEP in exchange for supporting tax changes
Photo: Press service of the Verkhovna Rada

Ukraine may offer lawmakers a concession on politically exposed persons (PEP) status in exchange for supporting unpopular tax reforms, Economichna Pravda (Economic Truth) reported.

Most of the contentious tax measures requested by international partners are expected to be combined into a single bill. Since MPs have been reluctant to approve higher taxes, they could be offered a "carrot": the abolition of lifetime PEP status.

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Tax reform is a condition for Ukraine to receive financial support from the International Monetary Fund (IMF) and the European Union. If these measures are not implemented, the country could face a funding shortfall as early as April 2026.

To secure approval of a new IMF cooperation program worth $8.2 billion, on which EUR 90 billion in EU funding depends, Ukraine must fulfill a number of "homework" tasks. These include ending the duty-free import privilege for parcels up to EUR 150, introducing a tax on digital platforms (the so-called "OLX tax"), and permanently fixing the military tax at 5%.

To encourage MPs to support the bill, officials are reportedly considering offering the abolition of lifetime PEP status. "This is a really sensitive issue for lawmakers because the status effectively blocks them from accessing most banks. For instance, PrivatBank automatically freezes PEP accounts. As a result, few people want to enter public service," one MP familiar with the plans told.

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The introduction of a value-added tax (VAT) for individual entrepreneurs is being discussed separately from the main package.

The government is also considering easing measures, such as raising the income threshold for mandatory VAT registration from UAH 1 million to UAH 2 million, postponing changes until the end of the war, and simplifying administration, including banning tax authorities from blocking VAT invoices for small businesses.

  • IMF Managing Director Kristalina Georgieva has emphasized that introducing VAT for individual entrepreneurs is necessary for Ukraine’s economic recovery.