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The Ukrainian government’s ability to boost tax revenues is important for maintaining Western financial aid to Kyiv, Gavin Gray, head of the IMF mission in Ukraine, said on Aug. 21.
Gray made the statement during a discussion hosted by the Center for Economic Strategy.
"Government expenditure needs will remain significant in the medium term, and thus progress on adopting the tax package will affect donors’ willingness to continue supporting Ukraine," he said.
The IMF representative also believes this would demonstrate the state’s effort to achieve greater self-reliance and emphasized the need for “some increase in tax revenues.”
“Unfortunately, this is the reality of the situation, so there is logic in the proposal [to raise taxes] put forward by the government,” said Gray.
In May, Chair of the parliamentary Finance Committee Danylo Hetmantsev stated that the state plans to increase certain taxes to reduce budget deficit. According to him, at least UAH 300 billion ($7.25 billion) is needed to finance the military in 2024.
On July 18, the Cabinet amended the 2024 budget, increasing expenditures by UAH 500 billion ($12 billion) and tax revenues by UAH 140 billion ($3.4 billion).
On July 22, the Finance Ministry announced that after the tax increase, the military levy on certain transactions could reach 30%.
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