Friday, December 25, 2015

Ukraine approves tax reform required by IMF

The Ukrainian Parliament on Thursday passed a bill amending the country's tax code system, thus fulfilling one of the key requirements set by the International Monetary Fund (IMF) to continue allocation of financial aid to the eastern European country.

The legislation was adopted with 251 votes in favor, a voting that has met with the required minimum benchmark of 226 votes, according to a statement posted at the parliament's website.

Under the new law, certain taxes will be raised, while some others will be lowered or replaced.

In particular, Kiev will increase the license duties on alcohol, tobacco and fuels and raise property and ecological taxes to increase budget revenues.

Some agricultural enterprises, which used to receive compensation for the value-added taxes from the state budget, will no longer enjoy preferential treatment in taxation with the new law.

In the same time, the payroll tax will be reduced from the current 41 percent to 20 percent, which is aimed at helping withdraw small and medium-sized enterprises out of the shadow economy.

The tax code amendments also stipulate that individuals will be levied a flat rate of 18 percent for income tax, instead of the existing two-tier system of 15 percent and 20 percent.

The taxation reform, which is expected to allow Ukraine to meet a deficit target of 3.7 percent of gross domestic product in its 2016 budget, has been required by the IMF to release a new tranche of credit for Kiev under the 17.5-billion-US-dollar bailout program.

Last week, the global lender warned that the Ukrainian parliament's failure to adopt the proposed tax code and the budget for 2016 could disrupt the program.

The voting on the budget is set to take place Friday.

  Xinhua -


  1. Ukraine Adopts Tax Reforms Sought By IMF - Temporarily ...

    Ukraine's parliament approved a budget for 2016, fulfilling a key demand of the International Monetary Fund that enables it to keep providing Kyiv with loans.

    Lawmakers approved a series of tax reforms and tax increases, reducing the tax on employers, unifying the tax rate on personal income, and increasing excise taxes on tobacco, fuel, and alcohol, with the goal of balancing the budget.

    The reforms were contentious. Many deputies argued they unfairly increased prices for Ukrainians who are already struggling to make ends meet during a deep economic recession.

    The IMF had warned it was critical to approve a budget that complied with the Fund's $17.5 billion bailout program before it would provide Kyiv with a third, $1.7 billion loan installment.

    It was not immediately clear whether the budget met all the IMF's requirements..............

  2. Ukrainian Parliament Adopts 2016 State Budget Meeting IMF Requirements...

    The Ukrainian parliament (Verkhovna Rada) has adopted the state budget for 2016 with a deficit of 3.7 percent of GDP, which meets the requirements of the International Monetary Fund (IMF).

    Over 260 Rada members voted in favor of the IMF-backed budget, with the document now going to Ukrainian President Petro Poroshenko for signing.

    The adoption of the budget was one of the main conditions for the release of a $1.7-billion loan from the IMF to Ukraine.

    Earlier, Ukraine's Minister of Economic Development and Trade Aivaras Abromavicius announced that the country’s cabinet had approved the 2016 budget.....


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