CASE Ukraine had previously identified and quantified this outdated bureaucratic requirement, calculating that it costs the economy 0.6% of GDP annually. Thanks to our persistent advocacy efforts, this issue has now been included in the Ministry of Economy’s SME development strategy. While progress is slow, the issue is gaining traction.
On March 21, representatives of leading Ukrainian economic think tanks met with Priscilla Tofano, Resident Representative of the International Monetary Fund in Ukraine, and economists from the IMF’s local office.
The meeting’s purpose was to exchange views between Ms. Tofano, IMF experts and Ukrainian economic think tanks on the country’s current economic situation and the key challenges facing Ukraine in 2025.
Representatives of the economic expert community shared with the IMF specialists their vision of this year’s risks, possible sources of budget deficit coverage, and priority institutional changes.
Experts from think tanks spoke about several key priorities, according to the expert community, such as the reboot of the most problematic (according to polls) agencies – the Customs and Tax Service (for this purpose, it is necessary to adopt the draft law 9243), with the prerequisite of electing the management team by commissions of international experts, thanked the IMF representatives for facilitating the reboot of the Bureau of Economic Security with the decisive vote of international experts.
The analysts also noted that 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. Draft laws Nos. 12359 and 12360 should be adopted.
Think tank experts noted that due to the inefficient work of these services, due to “gray schemes”,” the state loses UAH 450-500 billion annually, in particular due to the three largest schemes: “gray imports” and smuggling (UAH 120-167 billion per year), shadow schemes for the sale of excisable goods (UAH 35-38 billion), and salary payments ‘in envelopes’ (UAH 115-230 billion).
During the discussion, representatives of the Ukrainian economic community also emphasized the importance of reforming the judicial and law enforcement system, eliminating the shortcomings of land tax administration, the uneven tax burden, particularly payroll taxation, and unjustified budget expenditures during the war.
The panelists discussed the economic sentiment of businesses, obstacles faced by entrepreneurs in wartime and ways to overcome them, and the results of the World Bank’s survey on the quality of tax administration and trust in fiscal authorities in Ukraine.
The IMF representative emphasized the importance of such meetings and exchanging ideas and stressed the criticality of continuing efforts to de-shadow Ukraine’s economy.
The participants agreed to continue further systematic communication on issues relevant to the country’s economy after the discussion.