IMF expects Ukraine to pass bill abolishing 2% single tax in July
MOSCOW. June 30 (Interfax) - The Executive Board of the International Monetary Fund (IMF) has agreed to provide Ukraine with additional time to pass the government's bill abolishing the 2% single tax and reinstating document checks under new criteria, IMF Mission Chief for Ukraine Gavin Gray said.
The IMF understood that the authorities need additional time to get the parliament's approval, Ukrainian media outlets said, citing Gray's statement at a briefing following IMF's decision on the first review of the Extended Fund Facility (EFF) program and the second tranche of $890 million to Ukraine. So, the IMF is expecting this bill to be passed by the end of July, Gray said.
At the same time, the mission chief emphasized that it is a very important legislative act in the context of the program based on the gradual mobilization of internal revenues.
Overall, there have been no delays in relations to agreements on the implementation of reforms in Ukraine in the past eight-nine months, he said.
Gray named reforms in management and countering corruption, in particular, passing the bill reinstating declarations of public officials and restoring the functions of the National Agency on Corruption Prevention in checking and verifying them, among the closest important structural beacons of the program.
The introduction of amendments to the law on financial monitoring and countering money laundering will be an important structural beacon in September in order to reinstate the enhanced due diligence measures in relation to politically exposed persons in line with the risk-based approach meeting the Financial Action Task Force's standards, Gray said.
The second review of the EFF program is tentatively planned for late November-early December, he said.
As reported, the four-year-long EFF program was approved on March 31, 2023, and the first tranche of $2.7 billion was allocated in early April. The planned schedule for the program envisaged allocating following the first tranche three more tranches of SDR 664 million (about $900 million) each to Ukraine in mid-June and mid-October this year, and at the end of February, following the results of the first, second, and third reviews, when compliance with the obligations for the end of April, June, and December, respectively, of this year is assessed.
On May 30, the IMF and the Ukrainian authorities reached a staff-level agreement on an updated set of economic and financial policies as part of the first review of the four-year-long EFF program for $15.6 billion. Ukraine had met all quantitative performance criteria at the end of April and all structural benchmarks at the end of May, thereby paving the way for the IMF's Executive Board to consider allocating the second tranche to Ukraine, the IMF said.