Ukrainian Parliament rejects EUR 150 parcels taxation bill, condition for receiving IMF funds

The Verkhovna Rada failed to secure enough votes to pass bill No. 12360 on key performance indicators (KPIs) for the State Customs Service (SCS), which also provided for amendments to the Customs Code regarding the cancellation of value added tax (VAT) exemptions for parcels worth up to EUR 150, as well as enough votes to send the bill for a repeat second reading.

According to the broadcast of the parliamentary session on Tuesday, May 26, only 127 lawmakers supported the bill in the second reading and as a whole (with the minimum required threshold being 226 votes), while 222 MPs voted in favor of returning it for a repeat second reading.

None of the 11 amendments to the bill received the required number of votes either.

As reported, on December 17 last year the Verkhovna Rada adopted at first reading bill No. 12360 on amendments to the Customs Code of Ukraine regarding the assessment of the efficiency and effectiveness of customs authorities.

Earlier, the parliamentary committee recommended bill No. 12360 for second reading regarding the introduction of key performance indicators (KPIs) for customs authorities.

According to head of the parliamentary finance committee Danylo Hetmantsev, this would introduce annual assessments of customs performance in line with World Customs Organization mechanisms.

The introduction of VAT on parcels worth up to EUR 150 was a benchmark under the financing program with the International Monetary Fund (IMF), which Ukraine was supposed to fulfill by March.

In addition, as previously reported citing Bloomberg, the EU planned to link part of the payments to Ukraine under the EUR 90 billion Ukraine Support Loan (USL) to the adoption of tax changes also required by the IMF. According to Bloomberg, this concerns the so-called macro-financial portion of the loan amounting to EUR 8.4 billion, the conditions of which have already been agreed by EU member states. To receive this financing, Ukraine must adopt legislative amendments, including those related to VAT on parcels worth up to EUR 150.