2023-03-19T11:39:00+02:00 Economy 2024-09-15T05:43:28+03:00

Ukrainian news

Tax Planning, Budget Without NBU, Anti-Corruption And BES: Media Learn First Details Of New IMF Program For U

Tax Planning, Budget Without NBU, Anti-Corruption And BES: Media Learn First Details Of New IMF Program For Ukraine

To receive funding from the International Monetary Fund, the Ukrainian government promises to fulfill a number of conditions.

Forbes Ukraine, with reference to its sources, has reported how much money Ukraine can receive from the IMF this year and what conditions need to be met.

 According to the sources, in addition to traditional anti-corruption reforms, we are talking in particular about an attempt to plan the state's own income on the horizon of five years and refusal to fill the budget through the NBU printing funds.

So, the key innovation that was not in previous programs is the midterm revenue strategy for five years. We are talking about something like a tax revenue plan, on which the Ukrainian state budget will rely in the coming years.

"These are the steps we will take to ensure fiscal sufficiency, sustainable development and macro-financial stability. That is, this is such an analogue of the macro framework," explained one of the high-ranking officials, tangent to negotiations from the Ukrainian side.

Another important position is the inadmissibility of issue financing of the state budget deficit and, instead, the government's more active attraction of money in the domestic debt market, says another participant in the negotiations. Last year, due to the instability of external assistance, the National Bank had to buy UAH 400 billion of state bonds of the Ministry of Finance (equivalent to USD 12 billion). In fact, the NBU printed the money so that the state could finance its expenses.

Also, the Cabinet of Ministers should review the macro parameters on which the budget is built this year. In particular, we are talking about the indicator of the average annual dollar exchange rate (in the current version - 42.2 UAH/USD - Ed.), on which the hryvnia equivalent of revenues from customs and expenses for the repayment of public debt depends. Given that now the retail rate is below 39 UAH/USD, the budget figure should also be smaller, one of the government members noted on anonymity.

A separate block of issues, as in previous programs, is devoted to anti-corruption. This time, this direction will also have an innovation - the reboot of the Bureau of Economic Security (BES), says one of the interlocutors from the Ukrainian side. There is no question of eliminating the Bureau, instead the government will hold a new competition following the example of the recent selection of the director of the National Anti-Corruption Bureau (NACB).

Current agreements stipulate that Ukraine can receive USD 4.5 billion by the end of 2023, or USD 5.5 billion over the next 12 months, says one of the senior officials involved in the negotiations on condition of anonymity. Earlier, the FT reported on the IMF's readiness to allocate USD 15.6 billion to Ukraine over four years. This figure was confirmed by the representative of the Ukrainian delegation at consultations with the Fund. Another interlocutor, tangent to the negotiations, said about the amount of the program in "more than USD 15 billion."

An important prerequisite for the adoption of a new program for Ukraine was the recent approval of changes to the Fund's policy, which allows the IMF to work with countries that are in uncertainty, explains one of the Ukrainian high-ranking officials. He did not specify what specific changes were in question. They probably relate to problems with macro forecasting in connection with the war.

Due to the lack of an understandable macro framework last year, the Ukrainian government could not agree with the IMF on a financing program. Instead, Ukraine was in a "monitoring program" for several months, which did not provide for money, but contained a number of conditions for moving to the next level.

Now until the final decision is reached, it remains to agree on the technical details that the Ukrainian side expects to do in the next few days, said one of the state managers representing Ukraine at the negotiations in Warsaw.

"This is a step-by-step plan that should lead us to a decision (of the Board of Directors of the Fund) on March 31," he expects.

According to the sources, the Ukrainian side hopes to finalize the agreements and get preliminary approval of the new program in a few days.