Ukraine to resubmit parcel tax bill tied to billions in EU and IMF aid
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Serhii Marchenko, Ukraine’s finance minister (Photo: Sergii Marchenko / Facebook)
Ukraine’s Finance Ministry will resubmit a bill ending VAT
exemptions on overseas parcels worth up to 150 euros because its passage is
required for the country to receive billions in international financial
assistance, Finance Minister Serhii Marchenko said, Ekonomichna
Pravda reported.
Marchenko said the bill must be passed because Ukraine’s
receipt of 4 billion euros in European Union aid depends on it.
He said that while Ukraine can cover its defense needs, it
currently lacks budget funds for non-defense needs.
As previously reported, the Verkhovna Rada failed on Sept. 1
to pass two bills needed to impose value-added tax on international parcels
worth up to 150 euros.
Passing the bills is a condition for Ukraine to receive a
third tranche under the IMF program worth $700 million and a second tranche of
3.7 billion euros in European Union macro-financial assistance under the 90
billion euro loan to support Ukraine.
Under an updated memorandum of financial and economic
policies for the IMF’s EFF program, Ukraine committed to passing the
legislation by the end of July as a new structural benchmark. The original
version required the legislation to be passed by the end of March along with
other tax measures, but that benchmark was not met.
Earlier, the Verkhovna Rada failed on May 26 to pass a bill
that would introduce VAT on imported parcels worth up to 150 euros. The new
Cabinet then submitted another bill on the same issue to parliament on July 29.
Ukraine’s Defense Minister Yevhenii Khmara said on Aug. 29
that the country currently faces a $27 billion defense funding shortfall.
Prime Minister Serhiy Koretskyi said on Sept. 1 that “the
government is introducing strict spending controls on budget funds not
earmarked for defense needs.”
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