Ukraine's recovery and reconstruction will require enormous financial resources, and the international community is willing to share part of the burden, but Ukraine needs to continue to play its part by strengthening its domestic revenue mobilization to finance increasing social and infrastructure needs, International Monetary Fund (IMF) Resident Representative to Ukraine Vahram Stepanyan has said.

"For post-war Ukraine, this will be a core prerequisite for sustained and robust economic growth. It follows logically that measures that reduce tax collection or erode the existing tax base would limit Ukraine's ability to meet its reconstruction and development goals, thus affecting negatively long-term economic growth," he said in an interview with Interfax-Ukraine.

Stepanyan said that the four-year $15.6 billion EFF Extended Fund Facility, approved at the end of March, aims to foster sustainable and robust economic growth.

According to him, one of the policy instruments to foster economic growth is tax, as efficient and fair tax policies allow redistribution of public resources to meet a country's social and infrastructure needs, while enhancing the competitiveness by leveling the playing field for businesses.

The IMF representative said that the National Revenue Strategy (NRS), which is being developed in 2023 in the program, in practical terms, will help to align revenue mobilization with government development priorities and medium-term spending needs, including reconstruction and social needs.

"To maintain the revenue base in the short-term, the focus will be on lifting measures introduced under Martial Law, and on reforms in tax and customs," Stepanyan said.

He said that the NRS will become a comprehensive roadmap including clear revenue and other policy targets covering both policy and administrative reforms.

The IMF representative recalled that in accordance with the Memorandum of Economic and Financial Policies submitted by the Ukrainian side, the strategy will include five main steps.

It will include: measures to strengthen tax and customs services; a revised simplified tax regime to address the erosion of labor taxes; alignment of VAT and excise duties with the EU acquis; strengthened anti-corruption measures and governance procedures to address integrity risks; and tax reforms for post-war reconstruction and investment.