Ukraine has fulfilled all IMF preconditions for approving a new $8.1 bln program

The International Monetary Fund’s board of directors is set to consider a new $8.1 billion loan program for Ukraine in the coming days.

If approved, the program will replace the current $15.5 billion IMF arrangement and will be aimed at supporting Ukraine’s macroeconomic stability and financing public spending as Russia enters its fifth year of full-scale war against Ukraine.

IMF spokeswoman Julie Kozak said Ukraine had met the preconditions necessary to advance its request for a new program. In particular, it is about submitting a draft law on the Labor Code and approving the budget.

The IMF also estimated that Ukraine’s economic growth in 2025 could be less than 2% as the war continues to strain the economy and budget.

“The Russian invasion continues to deal a serious blow to Ukrainians and the economy,” Kozak said.

She added that the IMF sees signs of disruptions in economic activity due to large-scale attacks on energy and logistics infrastructure and is closely monitoring the situation.

The IMF predicts that the war will end in 2026. But there is a negative scenario – the war will continue until 2028.

Recall that the IMF decided to cancel prior actions for a new $8.1 billion loan program for Ukraine. These are requirements for the introduction of VAT for individual entrepreneurs, duties on international parcels, taxation of digital platforms and the extension of military levies.

The initial plan of the bill was to establish a value-added tax (VAT) for self-employed entrepreneurs (IEOs) with an annual income of more than one million hryvnias. This loophole is actively used by large companies and restaurant chains to reduce tax payments.

All tax and customs changes that are no longer prior actions will become structural beacons for the next revision of the program. They will be combined into a single bill called the Beautiful Tax Bill.