According to the Memorandum signed with the IMF, the revenue strategy will continue to be the basis of tax policy and administration reforms and will increase tax revenues by approximately 3.0-4.0% of GDP over the program period.
The single tax system may be reformed in Ukraine in the medium term or after the end of the war. The National Income Strategy will be adopted by the end of 2023, so it enables such reform. This is proven by the Memorandum of Understanding with the IMF.
Ukraine is focusing on a number of tax categories whose reforms will help broaden the tax base, particularly labor/personal income tax, corporate income tax, and consumption taxes.
“We remain on track to adopt the National Income Strategy by the end of 2023 (structural marker, end of December 2023),” the document says.
The National Income Strategy includes:
- measures to strengthen state tax and customs services;
- a revised simplified tax regime to address labor tax erosion through the transformation of the legal framework of labor relations into civil law;
- Bringing VAT and special consumption taxes into line with EU legislation;
- actions to increase corporate income taxes;
- strengthening anti-corruption measures and governance procedures to address integrity risks;
- Tax reforms that balance the need to ensure an adequate revenue base with the vital tasks of supporting EU membership, environmental reforms and post-war recovery, including much-needed investment and industrial development.
In addition, the National Revenue Strategy will include revenue mobilization targets, with specific increases in revenues from reforms in the main tax categories, and will also cover medium-term/post-war tax reforms (e.g. flat tax regime), as well as risks and exposures. unexpected situations.
The government will also prepare an assessment of the effectiveness of tax incentives, including their cost to the budget, in order to have a unified approach to reform (structural marker, end July 2024).
Let us remind you that the updated Memorandum of Understanding with the IMF was signed by Ukrainian President Vladimir Zelensky, Prime Minister Denis Shmygal, Finance Minister Sergei Marchenko and NBU chairman Andriy Pyshny. It involves voluntary commitments by country officials to take certain steps.
Focus It has already been reported that Ukraine received $2.7 billion from the IMF in the summer of 2023 under special drawing rights to combat the crisis.
Source: Focus
John Holton is a seasoned author and journalist, known for his expertise in economics. He currently works as a writer at 24 news breaker, where he provides readers with in-depth analysis and commentary on the latest economic developments. With a background in finance and a talent for explaining complex economic concepts in a clear and accessible way, John’s writing is a must-read for anyone interested in staying informed about the economy.