IMF backs down on unpopular tax changes for Ukraine, PM says

Prefer on Google by Luca Léry Moffat Ukraine's Prime Minister Yuliia Svyrydenko meets with the International Monetary Fund in Washington, D.C. for the IMF Spring Meetings from April 12-18, 2026. (Svyrydenko/Telegram) The International Monetary Fund agreed that one of the strings attached to its $8.1 billion program to Kyiv is "non-constructive," Ukraine's Prime Minister said, after the fund held talks with Ukrainian officials in Washington D.C. last week. Kyiv signed up to four new taxes as part of the lending agreement in October last year as part of an effort to boost revenue mobilization, but the changes are widely unpopular in Ukraine — especially a new VAT tax on self-employed entrepreneurs, a commonly used employment status. "During the Spring Meetings, we found understanding from our partners that this is indeed a sensitive topic and a non-constructive idea," Ukrainian Prime Minister Yulia Svyrydenko said on April 19 in a Telegram post , referring to the new VAT tax. "We will continue to work together on the necessary decisions and explore other alternative measures to ensure the revenue part of the budget for 2027," she added. The comments follow the IMF and World Bank Spring Meetings held in Washington, D.C., a week of high-level talks attended by the world's economic leadership. Ukraine sent a high-level delegation, including Svyrydenko and the country's finance minister. The Kyiv Independent earlier reported that the fund had signaled it was open to renegotiating some of the toughest elements of the program. Three people familiar with the matter told the Kyiv Independent that potential renegotiations could take place in May, when the IMF will next send a staff delegation to the country. It would be the second time that the fund has watered down the program. Kyiv in November 2025 agreed to implement the new taxes before the program started, but in February secured the fund's blessing to postpone the deadline to March 31, once the program had begun. The changes came after IMF chief Kristalina Georgieva visited Kyiv in February, as the country suffered its toughest winter since the full-scale invasion began over four years ago, as Russian attacks on energy caused widespread electricity and heating outages. Ukraine is widely seen to have been in a weak negotiating position when the program was preliminarily agreed in November 2025, which came after the biggest corruption scandal of President Volodymyr Zelensky's tenure. Ukraine has agreed to a wide range of reforms as part of financing agreements with its partners, including the IMF. The reforms are designed to shore up the country’s finances and more closely align Kyiv with European and international standards. The $8.1 billion loan is designed to be disbursed to Kyiv in tranches over four years, and galvanize funding from other international partners. IMF programs reassure partners that Ukraine is committed to making the necessary reforms to shore up its finances. It is the IMF's second program to Kyiv since the full-scale invasion began in 2022. The first program began in 2023 — and was the first time the fund had ever lent to a country at war in its nearly 80-year history.