The innovations of the EFF extended financing program "a floor on social spending" and "a floor on nominal tax revenues" are designed to help the authorities, in particular Ministry of Finance, to manage the fiscal accounts under extremely difficult circumstances of scarce resources and growing spending needs, International Monetary Fund Resident Representative in Ukraine Vahram Stepanyan has said.

"A floor on social spending (indicative target under the program) is established to ensure that social spending is safeguarded in times when the authorities have had no alternative but to streamline most of the non-defense spending," he said in an interview with Interfax-Ukraine.

Stepanyan said that tax revenues are subject to several risks stemming from the war, as well as potential policy choices that could erode the tax base.

According to him, the floor on nominal tax revenues (quantitative performance criteria under the program) is a measure to protect tax revenues that are embedded in 2023 budget, including through adoption of legal amendments that should help mobilize projected revenues.

"This quantitative target will help safeguarding revenues from measures eroding tax base. In the short-term this may help alleviate financing constraints while supporting reconstruction and social spending in medium-term," Stepanyan said.

He said that the Ministry of Finance has a particularly challenging task in managing a wartime economy.

"What I have seen at the Ministry is a team of dedicated professionals working hard to achieve the program objectives, and our experts stand ready to help in this by providing policy advice and capacity development as needed," Stepanyan said.