Restoring Ukraine will require significant resources. The international community is ready to share some of the burden, but Ukraine must do its part.
The mobilization of domestic revenues will be a key condition for sustainable and long-term economic growth in post-war Ukraine. This was stated by the IMF Resident Representative in Ukraine Vahram Stepanyan in an interview with Interfax-Ukraine, published on Monday, May 1.
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He noted that the restoration and reconstruction of Ukraine will require significant financial resources. The international community is willing to share some of the burden, but Ukraine must continue to do its part and increase domestic revenue mobilization to fund social and infrastructure needs.
“For Ukraine after the war, this will be the main condition for sustainable and long-term economic growth. It logically follows that measures that reduce tax revenues or destroy the existing tax base limit the ability of Ukraine to achieve its reconstruction and development goals, which negatively affects long-term economic growth,” he said.
Stepanyan said the $15.6 billion four-year extended financing program approved at the end of March aims to facilitate such sustainable and reliable economic growth.
According to him, one of the tools to promote such economic growth is an effective and fair tax policy that allows the redistribution of public resources to meet the country’s social and infrastructural needs while increasing the competitive by providing a level playing field for businesses.
The IMF representative noted that the National Revenue Strategy (NRS), whose development is discussed in the 2023 program, in practical terms will help align revenue mobilization with the government’s development priorities and needs on long-term spending, including reconstruction and social needs.
“To support the revenue base in the short term, the focus will be on the elimination of measures introduced under martial law and reforms in the areas of tax and customs,” Stepanyan said.
He mentioned that VAT will be a comprehensive roadmap containing clear revenue targets and other policy objectives covering political and administrative reforms.
Earlier, the IMF clarified the forecast for Ukraine’s GDP. The Fund came to the conclusion that the Ukrainian economy has become more stable in the face of active hostilities, but by the end of the year, a “minus” GDP is expected.
Source: korrespondent
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