Ukraine Sets Out Fiscal Plans In Talks With IMF
Ukraine has ruled out major tax reform, in consultations with the International Monetary Fund.
The IMF noted that Ukraine has major substantial progress on improving its finances. The IMF said budget execution continues to be strong, over-performing relative to program targets. The 2016 budget deficit has been limited to 2.3 percent of gross domestic product, compared to a target of 3.7 percent of GDP. The over-performance was the result of stronger tax and non-tax revenues, it said.
Setting out its near-term tax policy commitments, Ukrainian authorities said: “Further tax reform will aim to increase the efficiency and equity of the tax system. We will refrain from any major tax cuts and will not introduce new tax exemptions and amnesty schemes.”
“We will substantially tighten the simplified tax regime from January 1, 2018, which provides a major loophole in our tax net. We will also refrain from introducing preferential tax treatment – other than for local property taxes –for companies operating in industrial zones.”
“To allow us to efficiently implement the harmonization of filing and payment of social security contributions and personal income tax, we will submit legislation to parliament for adoption by end April 2017. We will legalize amber mining and gambling, which should provide additional revenues to the budget not later than in 2018.”
Finally, authorities said they will accelerate revenue administration reform to improve tax compliance rates, broaden the tax base, and improve the business climate.