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The IMF announced its position on taxes in Ukraine

Photo: aseanop.com

Government spending needs will remain significant over the medium term, says Gavin Gray.

Raising taxes in Ukraine could have a positive effect on the willingness of Western countries to provide aid to Kyiv. The head of the fund’s mission in Ukraine, Gavin Gray, said yesterday in a discussion at the Center for Economic Strategy (CES).

According to him, donors expect Ukraine to become freer.

“Government spending needs will remain significant in the medium term, and therefore progress in passing the tax package will affect donors’ willingness to continue supporting Ukraine,” he said.

Gray recalled that a very lively debate took place in Ukraine about the tax package.

“I accept the fact that there is interest and healthy debate on economic policy measures, and we have seen comments raised by representatives of the business community and civil society, mainly on tax compliance and tax evasion ,” he said.

The head of the fund’s mission noted the need for “some kind of increase in tax revenues.”

“Unfortunately, the reality of the situation is this, so there is logic in the proposal presented by the government,” he added.

Earlier in July, the Cabinet of Ministers approved changes to the state budget, proposing to increase its spending by UAH 500.3 billion, of which UAH 495.3 billion will be allocated to the needs of the security and defense sector. It was planned that the funds would be raised through increased taxes and increased borrowing in the form of government bonds.

The Finance Ministry also said that a tax hike is inevitable, as all other sources of increased funding for the defense sector have been exhausted.

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Source: korrespondent

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