The IMF expects Ukraine to develop a revenue strategy

The International Monetary Fund (IMF) expects Ukraine to develop a national revenue strategy, IMF Managing Director Kristalina Georgieva said in a statement following the second review of the program of cooperation with Ukraine, UNN reports. 

As the war prolongs, it continues to strain Ukraine’s public finances. Timely external disbursements as well as continued effort on the domestic market are key to meeting Ukraine’s financing needs and preserving macroeconomic and financial stability. In addition, decisive policy actions are needed to secure fiscal and debt sustainability. Revenue mobilization is a crucial pillar to help meet financing needs and support reconstruction and social spending. Fiscal priorities include launching the National Revenue Strategy, avoiding measures that erode the tax base, and progressing on reforms to further strengthen the frameworks for medium-term budget preparation, budget credibility, fiscal risks and transparency, and public investment management. A commercial debt treatment in line with program parameters will also help restore sustainability and create space for critical spending, 

"Steadfast reform momentum to anti-corruption and governance frameworks will be essential to mitigate corruption risks and promote public trust and donor confidence. Decisive structural reforms, in public investment management, governance, and the business environment, can also begin to lay the groundwork for achieving strong, balanced, and green growth in the reconstruction phase and support Ukraine’s path to EU accession. An integrated strategy for reconstruction will also help to mitigate fiscal risks and increase the efficiency of spending. Appropriate policy and reform choices can help support the return of migrants, investment flows and productivity growth needed to support a sustained high growth path in the years ahead," the IMF director said.

According to Bloomberg, the head of the IMF mission to Ukraine, Gavin Gray, praised Ukraine’s progress on anti-corruption reforms and the enactment of legislation to restore asset declarations. The IMF on Monday also said that Ukraine in the first half of next year should pursue an "ambitious" external commercial debt restructuring to help restore debt sustainability.

On December 11, the IMF Executive Board approved the second review of the EFF program for Ukraine, which paves the way for Ukraine to receive another tranche of almost $900 million.