Ukraine says IMF has deferred proposed VAT expansion to sole proprietors while alternatives are discussed
The Facts
- Prime Minister Yulia Svyrydenko said the IMF treated the proposed introduction of VAT for sole proprietors as a sensitive issue.
- Svyrydenko said the understanding was reached during consultations held at the Spring Meetings in Washington.
- According to Svyrydenko, Ukraine’s delegation held multiple consultations with the IMF and European partners on the issue.
- Svyrydenko said the government and its partners will work on alternative measures to support the revenue side of the 2027 budget.
- Multiple outlets reported that the proposed VAT measure for sole proprietors is being postponed or deferred for now rather than implemented immediately.
- One of the tax measures previously included in IMF-related discussions was mandatory VAT payment from January 1, 2027 for simplified-tax-system businesses with annual income above 4 million hryvnias.
Context
What did Ukraine say changed in its talks with the IMF?
Svyrydenko said the IMF recognized that applying VAT to sole proprietors is politically and socially sensitive, and that the proposal has been deferred for now after discussions during the Spring Meetings in Washington unian,Deutsche Welle,УКРІНФОРМ.
What happens instead of the proposed VAT change?
The government says it will continue working with the IMF and European partners on alternative measures to ensure budget revenues for 2027 rather than moving ahead now with the VAT proposal for sole proprietors Портал "Щод…,РБК-Украина,Радіо Свобо….
Why was this proposal significant?
The VAT proposal was part of broader tax measures linked to Ukraine’s IMF program, and at least one reported version would have required VAT payments from January 1, 2027 for simplified-tax-system businesses with annual income above 4 million hryvnias Лига Новости,ФАКТЫ.
How left and right read it
Kyiv appears to have won breathing room on a tax change that had become politically and socially sensitive, with Yulia Svyrydenko saying the IMF agreed to defer extending VAT to sole proprietors after consultations in Washington. The government now says it will work with the IMF and European partners on other ways to raise revenue for the 2027 budget rather than move ahead immediately with a measure that had been part of IMF-related tax talks.
The notable point is that Ukraine pushed back on a proposed VAT expansion to sole proprietors and, according to Yulia Svyrydenko, persuaded the IMF to treat it as sensitive and postpone it for now. That leaves time to find other ways to support the 2027 budget instead of imposing a new requirement that had been discussed for simplified-tax businesses earning above 4 million hryvnias annually.
The receipts — 49 sources
Wire services (1)
Independent coverage (48)
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