The International Monetary Fund (IMF) has officially agreed to exclude the item on mandatory VAT payment for individual entrepreneurs (IEPs) from the list of requirements for Ukraine. The Prime Minister of Ukraine Yulia Svyrydenko announced the achievement of a strategic compromise.
🤝 Results of negotiations in Washington
According to the Head of Government, the issue of taxation of small businesses became one of the key topics during the Spring Meetings. The Ukrainian side managed to convince partners of the inexpediency of introducing this tax burden in the current conditions.
📢 “During the Spring Meetings, we found understanding from partners that this is a truly sensitive topic and not a constructive idea, as President Zelensky has repeatedly said to IMF representatives,” Svyrydenko said.
The decision was preceded by a series of multi-level consultations not only with the IMF leadership, but also with representatives of European institutions. Kyiv’s main argument was to preserve the viability of small businesses as the foundation of economic stability.
📌 Budgetary filling prospects:
Search for alternative sources to fill the state budget-2027.
📈 Optimization of existing tax mechanisms without pressure on micro-enterprises and small businesses.
Joint development of a reform roadmap with foreign experts.
📢 “We will continue to work together on the necessary solutions and develop other alternative measures to ensure the revenue side of the budget for 2027,” Svyrydenko emphasized.
⚠️ History of the issue and financial obligations
Previously, the IMF Board of Directors approved a large-scale four-year Extended Fund Facility (EFF) for Ukraine for a total of 8.1 billion US dollars. As part of the initial agreements, the Ukrainian side agreed to a number of tough steps. One of the most discussed items was the abolition of the VAT exemption for individual entrepreneurs, which was supposed to come into effect on January 1, 2027.
It was also previously reported that the International Monetary Fund (IMF) agreed to cancel the prior conditions and made concessions (prior actions) for Ukraine’s new $8.1 billion credit program.
ℹ️ This risk has now been removed from the agenda, allowing entrepreneurs to continue working under the current tax rules. The government is focusing on stimulating domestic production and attracting investment to cover the deficit.
