Ukrainian Parliament Seeks to Unlock Delayed IMF Funding by Voting on Controversial Tax Bills

The Ukrainian Parliament is gearing up for a significant vote on April 7 that pertains to essential tax bills with a direct connection to funding from the International Monetary Fund (IMF). This vote comes against a backdrop of political tension and friction among Parliament, the government, and President Volodymyr Zelensky due to delayed legislation.

After failing to meet the IMF's official deadline of March 31, Parliament will consider bills that propose extending the military tax for three years after the end of the war, implementing taxes on income from digital platforms, and imposing fees on packages. Three of these four measures are necessary to unlock the next tranche of the IMF program, scheduled for June this year.

However, lawmakers have yet to adopt the fourth requirement of the IMF, along with a series of comprehensive reforms that could unlock billions of dollars in additional funding from the EU and the World Bank. Ukraine has not yet finalized the development of a new tax for self-employed entrepreneurs, which remains the most contentious issue of the IMF program due to its widespread unpopularity among the populace.

Failure to meet all conditions of the $8.1 billion IMF program could jeopardize the next tranche of nearly $700 million, scheduled for June. Parliament has also approved three out of four conditions to secure a $3.35 billion loan from the World Bank but has failed to adopt the final reform related to the Single European Payment Area. According to the World Bank, the deadline for meeting these criteria is April 20.

Meanwhile, billions of dollars urgently needed by Ukraine remain blocked or at risk of being lost, as Kyiv struggles to advance reforms necessary to unlock funding from the EU. According to a consortium of Ukrainian analytical centers, RRR4U, approximately $7 billion is currently withheld from Kyiv as of April 1 due to unmet EU conditions.

Ukraine will send a large delegation to the spring meetings of the IMF in Washington next week, where high-ranking Ukrainian officials will meet with representatives of the Fund. A broad range of reforms aims to bring Ukraine closer to European and international standards, as well as to reduce the shadow economy and improve Ukraine's revenue collection capacity.

Brussels has intensified pressure on Kyiv in recent weeks in anticipation of this week's plenary session. EU Commissioner for Enlargement, Olivér Várhelyi, noted that the Parliament session presents an "opportunity to move forward" on the list of 11 reforms required under the Ukraine Facility program, in a letter addressed to Ruslan Stefanchuk, the Speaker of the Ukrainian Parliament.

Officials, including Prime Minister Yulia Svyrydenko, have engaged in a series of negotiations with members of Zelensky's party as the situation evolves. Ahead of the vote, the heads of parliamentary committees met on April 6 for the first time with the new head of the President's Office, Kyrylo Budanov. While Budanov's primary focus is on US-led peace negotiations, his predecessor Andriy Yermak unofficially controlled Parliament, ensuring votes on specific bills.

Parliamentary dysfunction has arisen due to several factors, including Zelensky's fragile supermajority, which exists de facto only on paper. One lawmaker, who wished to remain anonymous, links the recent shift in voting dynamics to the return of Davyd Arakhamia, the leader of the Servant of the People faction, to the vote-gathering process as peace negotiations with Russia are currently stalled.

However, the Ukrainian Parliament has continued to stagnate during the first three months of 2026, according to RRR4U data, having implemented only one of eight indicators necessary for the EU reform program required to unlock funding from the €50 billion ($58 billion) Ukraine Facility.

The funding that will be unlocked through reforms is critically important as Kyiv approaches a critical drop in foreign financing, on which Ukraine relies to sustain its war efforts and keep the state afloat. The primary burden of this funding falls on the EU.

While Brussels hoped to finalize a €90 billion ($104 billion) credit deal for Ukraine, Hungary unexpectedly blocked this agreement in February 2026, allegedly due to a dispute related to oil transit through the Soviet-era Druzhba pipeline. Hungarian Prime Minister Viktor Orbán has made opposition to Ukraine central to his electoral strategy as national elections approach on April 12. Orbán's party is trailing in the polls, posing a significant threat to his 16-year hold on power.