Head of the IMF mission shared his thoughts on Ukraine's tax increase plans.

The Head of the IMF mission in Ukraine, Gavin Gray, stated that tax increases could positively impact the willingness of international donors to continue supporting Ukraine.

According to him, donor support, commercial debt restructuring, and tax increases should be considered as a single package for addressing the country's funding shortfall.

"Progress in adopting the tax package will affect donors' willingness to continue supporting Ukraine," Gray noted during a discussion on the state budget deficit organized by the Centre for Economic Strategy.

The Head of the IMF mission emphasized that all three elements of the package are interconnected and aimed at effectively addressing the funding shortfall. According to him, the approval of the tax package announced by the government would be a testament to Ukraine's commitment to greater self-sufficiency and independence from external assistance.

Government's tax increases:

• Increase in the military levy rate on individual incomes from 1.5% to 5%
• Introduction of a military levy for legal entities and 3rd group sole proprietors at 1% of income
• Increase or introduction of a military levy on mobile communication, purchase of banking metals, real estate, and automobiles

After criticism of the bill, a preliminary agreement was reached to replace the 1% turnover tax on legal entities with an increase in VAT by several percentage points from the current level of 20% and the introduction of a fixed payment for gas station storage facilities instead of an advance tax.