The State Tax Service is involved in processes related to cooperation with the International Monetary Fund in terms of improving tax administration, the so-called VAT for individual entrepreneurs. This was stated in an interview with Censor.NET by the acting head of the State Tax Service of Ukraine Lesya Karnaukh.
“Although from the inside it is about something else. When we hold consultations and meetings with the Ministry of Finance or with the head of the government, we always talk about the modernization of the simplified taxation regime. The IMF memorandum does not say: introduce a total VAT for individual entrepreneurs. There is no such thing there,” she explained.
According to Karnaukh, the tax policy advocated by the Ministry of Finance and the government is that moderate tax rates and an expanded tax base are important for them.
“We have them weighted average. We do not have super-high rates for all taxes. If we break it down and compare it with the countries of the European Union, where we are moving, we have average rates. In some countries, VAT is 22%, in some – 18%. Depending on economic conditions and what is taxed. But an expanded tax base, moderate rates and very clear work on identifying the payer and the tax base – this is what the International Monetary Fund wants from us, “said the acting head of the State Tax Service of Ukraine.
Therefore, a lot of effort is currently being made with the Cabinet of Ministers to improve administration.
“This is what we are responsible for as the State Tax Service. Therefore, regardless of how the decision is made (whether the so-called VAT for individual entrepreneurs will be introduced or not), we are already looking at what we can change. We conducted the following internal exercise: I set each department the task of finding 5 working accountants and asking them what they like, what they don’t like, how much time they spend. And they completely mapped out the process of VAT administration from the moment of its occurrence to reporting and payment, in full. And identified problems that can be solved,” Karnaukh noted.
It was previously reported that on December 18, 2025, the Ministry of Finance published a draft law that provides for mandatory payment of VAT for single tax payers (groups 1-3) in case the annual income/volume of taxable transactions exceeds UAH 1 million. The draft states that the norm should come into effect from January 1, 2027, and the requirement to register as a VAT payer also applies to the supply of goods and services online (via digital platforms, applications, etc.). The initiative on VAT for individual entrepreneurs follows from Ukraine’s obligations under the latest agreements with the IMF. Analytical centers stated that the government’s justification for introducing VAT for individual entrepreneurs on a “simplified” basis is divorced from reality – the Ministry of Finance’s calculations allegedly do not take into account the burden on consumers and underestimate the administrative costs of business.
Business criticized the Ministry of Finance’s proposal. Entrepreneurs believe that the introduction of individual entrepreneur taxation creates an additional burden: there is a need to hire an accountant, the need for administration and reporting, risks of fines in the future, cash gaps, which will ultimately affect the price for the consumer. In addition, a petition on the Cabinet of Ministers’ website to withdraw the Ministry of Finance’s initiative gained 25 thousand votes.
In mid-January 2026, think tanks appealed to President Volodymyr Zelensky, Prime Minister Yulia Svyrydenko, Finance Minister Serhiy Marchenko, Economy, Environment and Agriculture Minister Oleksiy Sobolev, as well as the heads of the parliamentary tax and economic committees, calling on them to review the draft law on mandatory registration of small businesses as VAT payers and set the registration threshold at UAH 6 million. In March 2026, the Ministry of Finance published a “big tax bill.” In April 2026, the IMF agreed not to insist on the introduction of VAT for individual entrepreneurs.
