Tax cuts will harm the reconstruction and development of Ukraine – IMF
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Measures that reduce Ukraine’s tax revenues or destroy the existing tax base will limit the state’s ability to rebuild, and therefore to economic growth.
This was stated by the permanent representative of the International Monetary Fund (IMF) in Ukraine Vahram Stepanyan in an interview with the agency Interfax-Ukraine.
He emphasized that an effective and fair tax policy allows redistribution of state resources and promotes economic growth both in general and in the case of Ukraine.
The restoration and reconstruction of Ukraine will require huge financial resources, Stepanyan explains. And although the international community is ready to share part of the burden, Ukraine must continue to do its part and strengthen the mobilization of domestic revenues to finance growing social and infrastructure needs.
For post-war Ukraine, this will be the main prerequisite for sustainable and long-term economic growth. “It logically follows that measures that reduce tax revenues or destroy the existing tax base limit Ukraine’s ability to achieve reconstruction and development goals, which negatively affects long-term economic growth,” the IMF representative added.
Stepanyan explained that in order to maintain the revenue base in the short term, the main attention will be paid to the cancellation of measures introduced under martial law and reforms in the tax and customs spheres.
We remind you:
Ambassadors of the Big Seven countries met with Deputy Head of the Office of the President Rostyslav Shurma and discussed the potential tax reform in Ukraine. The G7 ambassadors emphasized the importance of continued cooperation with the IMF.
As part of the new program of cooperation with Ukraine, the IMF emphasized on avoiding new measures that may lead to a decrease in tax revenues. In particular, we are talking about the introduction of new tax benefits for the payment of certain taxes.
Currently, a wing of supporters of radical tax reform has formed in the Ukrainian government, which provides for a significant reduction in the rates of key taxes – income tax, value added tax and personal income tax – up to 10% each.
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