On November 26, the International Monetary Fund (IMF) announced a new four-year loan program for Ukraine worth $8.1 billion. In return, Ukraine agreed to terminate several tax benefits, particularly for individual entrepreneurs and the processing industry.
A key change will require individual entrepreneurs with annual incomes exceeding 1 million UAH to pay value-added tax (VAT). Currently, many sole proprietors work without VAT, which lessens the tax burden on small businesses but enables tax avoidance practices, notably when large companies divide operations into smaller units.
Another significant reform involves taxing all international parcels delivered to Ukraine regardless of value. Parcels over €150 will not only be subject to a 20% VAT but also a 10% import duty. The National Bank of Ukraine supports these measures due to a record current account deficit.
The IMF also criticized large government expenditures on free railway transport for certain citizen groups—a humane policy, but costly for the state budget during wartime deficit conditions.
Experts note that while strengthening fiscal discipline helps Ukraine’s macroeconomic stability and compliance with IMF requirements, increased taxes may reduce purchasing power and drive the economy into the shadows.
The IMF program’s approval matters not only for the loan itself but as a signal for other international donors. Nonetheless, fiscal tightening and benefit cuts remain a topic of public debate.
