The IMF is urging Ukraine to take decisive action against the shadow economy, which, according to the Cabinet of Ministers, accounts for more than 30% of the country’s GDP. This was a key topic during IMF mission talks with Ukrainian government officials in Kyiv.
Danylo Hetmantsev, Chairman of the Ukrainian Parliament Committee on Finance, confirmed that the issue of reducing the shadow economy came up during his meeting with IMF representatives as a condition for continued financial support. “We can uncover at least ₴900B ($21B) per year in the shadow”, Hetmantsev said.
The EBA has already asked the G7 countries for increased support for Ukrainian law enforcement agencies that are fighting the illicit trade in excisable goods. The business community mainly emphasized the need to expose and dismantle illegal tobacco sales networks and impose stricter sanctions on those involved in producing and circulating cigarettes, electronic cigarettes, and e-cigarette liquids. ICC Ukraine also urged the IMF regional representative in Ukraine to boost efforts against the illegal circulation of tobacco products.
“IMF involvement in resolving this issue can greatly strengthen efforts to combat the shadow economy and increase tax revenues to the state budget,” the appeal states.