The purpose of the meeting was to exchange views between IMF economists, including the head of the IMF mission to Ukraine, Mr. Gavin Gray, and Ukrainian economic think tanks on the current economic situation in the country and the key challenges facing Ukraine in 2024.
Representatives of the economic community shared with the IMF experts their vision of this year’s risks, possible sources of budget deficit coverage, and priority institutional changes.
Think tank experts shared their joint assessment of the Cabinet of Ministers’ draft law on tax increases and introducing new taxes. According to Ukrainian think tanks, most of the provisions of draft law No. 11416 are incredibly harmful to Ukraine’s economy, while there are much less harmful sources of budget revenues. According to OECD research, direct taxes are the most detrimental to economies, indirect taxes are less toxic, and real estate and land taxes are even less dangerous.
During the meeting, experts from domestic economic think tanks emphasized the importance of rebooting the Customs and Tax Service with the election of its management by commissions of international experts (draft laws No. 6490d and No. 9243), following the model of rebooting the Bureau of Economic Security. The Government’s measures to introduce performance criteria for the tax and customs services, assess their work by analyzing tax gaps, conduct electronic tax audits, and implement effective anti-corruption measures have not been implemented for a long time. As a result, due to the inefficient work of these services, the state loses about UAH 300 billion a year, in particular, due to gray imports and smuggling (UAH 120-150 billion), shadow schemes for the sale of excisable goods (UAH 40-45 billion), and payment of wages in envelopes (UAH 70-100 billion).
During the discussion, the representatives of the Ukrainian economic community also touched upon the National Revenue Strategy until 2030 and discussed the expectations of business shortly.
The parties agreed to continue further systematic communication on the country’s economic issues.