Both the European Union and the International Monetary Fund are conditioning additional financial assistance to Ukraine on the implementation of specific tax reforms, media reports said on Wednesday.
The EU is reviewing its €90 billion (US$105 billion) loan package for Kyiv and may link roughly €8.4 billion – about 10 % of the total scheduled for 2026 – to changes in the country’s preferential tax regime. Under the current Simplified Taxation System, certain businesses pay a flat 5 % tax on revenue rather than on profit. The European Commission, which approved the interest‑free loan after Hungary lifted its veto, is considering requiring firms that exceed a turnover of 4 million hryvnia (approximately US$91 000) to pay a 20 % value‑added tax (VAT). A spokesperson said the bloc is working “tirelessly” to finalize the memorandum outlining the conditions, but gave no timeline.
The IMF, which is providing $8.1 billion under its existing programme, has also called for a broader tax base. In addition to supporting the EU’s business‑tax proposal, the Fund wants Ukraine to introduce VAT on low‑value imported parcels. Goods currently exempt from VAT if their value is under €150 would become taxable, a move the Ukrainian finance ministry estimates could generate about 10 billion hryvnia (US$227 million) a year.
A draft law containing the proposed changes has been submitted to the Ukrainian parliament but has not yet been debated, according to reports. Prime Minister Yulia Sviridenko described the measures as “not constructive” and “highly sensitive,” reflecting growing domestic resistance to further tax increases.
Analysts warn that failure to pass the necessary legislation could postpone the IMF’s scheduled June review, jeopardising future disbursements from the Fund and potentially affecting linked EU support. Both lenders coordinate their reform demands, making the passage of the tax measures a critical step for Ukraine’s financing.
Russia has criticized the forthcoming reforms, arguing that continued Western funding prolongs the conflict and imposes a burden on European taxpayers. Russian Security Council Secretary Sergey Shoigu said the EU package would strain “ordinary Europeans” and represent another step toward a loss of sovereignty for European states.
The outcome of the tax‑reform negotiations will shape the next phase of financial assistance to Ukraine, influencing both domestic fiscal stability and the broader geopolitical balance.
