Ukraine must cancel exemptions for VAT registration, close customs loopholes for consumer goods – IMF prior actions

To open a new International Monetary Fund (IMF) financing program, Ukraine must take the following prior actions: expand the tax base by adopting legislation on the taxation of income received through digital platforms; close loopholes in customs for the import of consumer goods; and cancel exemptions for VAT registration, Fund’s Communications Director Julie Kozack said.

"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," she said this at a traditional briefing at the Fund on Thursday, according to an Interfax-Ukraine correspondent.

Kozack added that the prior actions included the adoption of Ukraine's 2026 state budget and obtaining appropriate financing guarantees from donors, as well as approval by the IMF executive board.

She said that the Fund team is currently evaluating the full text of the budget adopted by the Verkhovna Rada on December 3. "But the preliminary assessment is that it's broadly in line with the program commitments," the Fund’s Communications Director said.

Speaking about the new program, Kozack noted that the Ukrainian authorities have confirmed their firm commitment to preserving a properly resourced and independent anti-corruption complex of institutions.

"They [the Ukrainian authorities] also agreed to continue reforms to tax and customs services, including by appointing a new customs head and improving IT systems to boost efficiency and to work to rebuild public trust, raise revenues, and support ultimately the reconstruction that Ukraine will need. And on the SOE side, the authorities have committed to improving financial planning, reporting and auditing, as well as reforming nomination procedures for state-owned enterprises and state-owned banks," the Fund’s Communications Director said.

During the budget adoption, Ukrainian Minister of Finance Serhiy Marchenko noted that he expected several more laws to be submitted to the Rada in the coming weeks that would increase tax revenues to the budget.

"We had an active discussion. We will continue this discussion with you tomorrow and work with you in December to adopt the necessary laws to ensure this budget's financing," the minister said.

As reported, it concerns draft laws regarding the taxation of sales through digital platforms and the reduction of the threshold for the taxation of foreign parcels from EUR 150 to EUR 45. It also concerns the abolition of the privilege for private entrepreneurs to not register as VAT payers, even though they can earn up to UAH 9.34 million per year. This privilege is not available to others with an annual income of more than UAH 1 million.