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The Ukrainian authorities seek to reform the tax system, but at the same time question its basic principles. This approach leads to a significant loss of income, believe the International Monetary Fund.
Ukraine is pursuing a two-way fiscal policy. On the one hand, the country is updating the tax system, and on the other, it is questioning the basic systemic principles, according to the International Monetary Fund report, which was published on November 23.
It will not be possible to find a middle ground between the two directions, such steps will lead to a significant loss of income and there is no evidence that this helps attract investment, the Fund warned.
Ukrainian authorities held aSerious work to meet international requirements for income tax and bring the tax regime in line with the standards of the Organization for Economic Cooperation and Development, he said in the report’s summary.
The IMF declared the intentions of the Ukrainian authorities, expressed in political debates on the abolition of the income tax and its replacement by a withdrawn capital tax.
“The profit will remain in the organization and the tax will be paid after the distribution of dividends to the shareholder,” explained the IMF.
Ukraine cooperates with the IMF in a new reserve program. The fund’s executive board approved it on June 9 of this year. It is supposed to allocate $ 5 billion to Ukraine in four tranches. On June 12, Ukraine received $ 2.1 billion from the first tranche.
The Fund designated Ukraine as “structural beacons” to receive the tranche. Among them are changes in the tax system. Ukraine has promised to refrain from any changes to the simplified tax system for sole proprietorships. There should be no new groups in this system, writes Liga.net in its analysis of the IMF memorandum.
Ukraine’s Finance Minister Serhiy Marchenko said that by the end of the year Ukraine expects to receive two tranches of $ 700 million from the IMF. Ukrainian President Volodymyr Zelensky said that in the current situation, the Ukrainian economy needs money from the IMF.
“It is profitable for us, it is not profitable, now it is like blood for the human body,” he explained.
The head of the National Bank of Ukraine, Kirill Shevchenko, said the IMF “has certain concerns about anti-corruption policy.”
Tymofiy Mylovanov, Advisor to the Head of the Office of the President of Ukraine, said on November 23 that Ukraine will not receive the next tranche from the IMF until the end of 2020.
