Leadership of Ukraine’s Finance Ministry and government and International Monetary Fund (IMF) experts have begun discussions in Kyiv on fulfilling the conditions of the Extended Fund Facility (EFF) program to agree on further steps of cooperation, the Finance Ministry reported on Wednesday.
“Within a week we plan to agree on further steps of cooperation, taking into account current conditions and state budget needs for the current year,” the statement quotes Finance Minister Serhiy Marchenko as saying.
The meetings will continue over the next few days in Kyiv, with discussions covering macroeconomic policy and key structural reforms, the ministry said.
As reported, on February 26 this year, the IMF approved a new four-year EFF program for Ukraine totaling $8.1 billion, which, taking into account the prolonged war, replaced the previous four-year program of $15.6 billion opened in March 2023, under which nine tranches totaling $10.6 billion were received. The first tranche of the new program amounting to $1.5 billion has already been received by Ukraine’s state budget.
To receive the second tranche of about $0.69 billion, Ukraine must adopt a package of tax measures by the end of March 2026 that provides for mandatory VAT registration for simplified taxation system taxpayers with annual income exceeding UAH 4 million starting January 1, 2027. The Finance Ministry’s initial initiative regarding a threshold of UAH 1 million was revised after a wave of criticism from the business community and a successful petition on the Cabinet of Ministers’ website. The government has not yet even submitted this draft law to the Rada.
In addition, on March 10, parliament rejected draft law No. 14025 on taxation of income received through electronic platforms, which was also part of the agreement with the IMF: only 168 deputies voted for it, short of the required minimum of 226 votes.
“A significant part of international financial support depends on fulfilling conditions and reforms agreed jointly with partners. That is why the Finance Ministry emphasizes the importance of consistent fulfillment of commitments made. This is a necessary prerequisite for attracting the full planned volume of financing and ensuring the stable functioning of the public finance system,” the Finance Ministry commented to Interfax-Ukraine on the current situation.
The new IMF program provides for a total volume of external financing for Ukraine with the participation of international partners during the 2026-2029 period of $136.5 billion in the baseline scenario and $146.3 billion in the negative scenario.