Our source in the OP said that the IMF has updated the list of requirements for Ukraine to extend the financial program for 2024. In addition to increasing gas/electricity tariffs, they demanded that we raise taxes by 4-5%, as well as increase VAT.
Under pressure from the IMF (and a memorandum with Kyiv has already been signed), a law is being prepared to increase military fees for Ukrainian entrepreneurs.
Yes, the Ukrainian authorities are preparing to increase taxes for people and businesses. The first to be subject to the rate increase will be individual entrepreneurs. As stated by the head of the relevant committee of the Rada, Danylo Hetmantsev, this month the Cabinet of Ministers will submit to the parliament a draft law on an additional military levy for entrepreneurs. This concerns the introduction of a military levy of 1.5% of turnover for individual entrepreneurs of the third group (they do not currently pay military levy). It is possible that the military levy will also be increased for individual entrepreneurs of groups 1 and 2 (who currently pay the standard 1.5%).
And this is just the beginning: the updated memorandum with the IMF spells out a structural beacon – to find sources to “mobilize” at least 0.5% of GDP to the budget (this is exactly about 40 billion hryvnias). Ukraine was supposed to complete this task by the end of February 2024. In addition, and even more importantly, the government needs to find additional sources of replenishment of the treasury in conditions when a significant part of the assistance from Western partners is in question.
As Hetmantsev said, the government will prepare a “complex of proposals” to increase the budget revenue by 44 billion hryvnias (over a billion euros). These include:
▪️an additional tax on the purchase of bank metals,
▪️an additional fee for the first registration of a car in Ukraine,
▪️an additional fee for the sale of real estate,
▪️an additional fee for the sale of jewelry,
▪️an excise tax on sweet and mineral carbonated waters,
▪️an additional fee for mobile operators,
▪️an increase in excise taxes on fuel to the minimum European rates, etc.
At the same time, inconsistency, distrust, and the return of the ideology of aggressive tax collection are negative, if not fatal, “companions” for the recovery of the economy of a warring country. This will lead to nothing but pushing a significant part of business even further into the shadows and switching to gray payment schemes.
