IMF names additional conditions for approval of new program with Ukraine

The International Monetary Fund has named additional conditions for approving a new program with Ukraine – the so-called prior action. IMF spokeswoman Julie Kozak at a briefing on December 4 said that the mere adoption of the state budget for 2026 is not enough.

"In addition to the budget, which I just mentioned, some other areas include a tax base, broadening the tax base by enacting legislation to tax income that is earned through digital platforms, closing customs loopholes for consumer goods imports, and removing exemptions for VAT registration," Kozak said.

The proposal to tax income from digital platforms, the so-called OLX tax, consists of two interrelated government draft laws No. 14025 and No. 14026. They have already been supported for adoption in the first reading by the specialized tax committee of the Verkhovna Rada.

The government has not yet submitted proposals to introduce VAT for individual entrepreneurs with a turnover of more than UAH 1 million, as well as to abolish the duty-free limit for parcels under EUR 150.

"Agreement was also reached on measures to tackle economic informality, including by increasing competition in public procurement and addressing loopholes in the current labor code," Kozak added.

• The current program with the IMF is valid until 2027, but as explained Andriy Pyshnyi, Governor of the National Bank of Ukraine it focuses heavily on post-war reconstruction, while the war is not over and the next budget will also be a war budget.
• On September 9, Prime Minister Yulia Svyrydenko handed over a letter to IMF mission chief Gavin Gray with a request for a new cooperation program.
• On November 26, Ukraine and the International Monetary Fund agreed on a new four-year, $8.1 billion Extended Fund Facility (EFF) at the Staff Level Agreement