IMF mission to review Ukraine's financing program will begin in last ten days of May – Pyshny

The International Monetary Fund (IMF) mission’s work under the first review of the new Extended Fund Facility (EFF) is expected to begin in the last ten days of May, National Bank of Ukraine (NBU) Governor Andriy Pyshny announced during a briefing on Thursday.

According to him, during the next round of mission talks, discussions on fiscal measures initiated during the spring meetings in Washington will continue. Specifically, the NBU governor noted that an understanding has now been reached regarding the postponement of the sensitive issue of introducing a value-added tax (VAT) for individual entrepreneurs.

"The Ukrainian delegation returned from Washington with the understanding that the sensitive issue of VAT for sole proprietors has been postponed. I am confident that further discussions will be conducted within the framework of the International Monetary Fund mission. We expect that the relevant work will begin at the end of May, that is, approximately in the last ten days," the head of the central bank emphasized.

Pyshny added that Ukraine is offering its partners alternative ways to cover fiscal needs by increasing the de-shadowing of the economy, and that some results have already been achieved, particularly in matters related to the reform of the State Customs Service and increasing the capacity of the Bureau of Economic Security (BES).

He noted that the National Bank supports the government’s position on seeking additional domestic resources for the budget to avoid unproductive pressure on gold and foreign exchange reserves.

As earlier reported by Bloomberg, the issue of introducing VAT for sole proprietors with annual incomes exceeding UAH 4 million is also a structural pillar of the new IMF financing program, which is also the subject of discussions with the European Commission as part of the EUR 90 billion macro-financial assistance memorandum. The Ukrainian side insists that introducing this regulation during a war is unconstructive and is working to postpone its implementation by a year, until 2027. Finance Minister Serhiy Marchenko, speaking at a meeting of the parliamentary temporary investigative commission, confirmed that the issue of introducing VAT for sole proprietors may be postponed based on the mission’s findings.