By the end of February, Ukraine is expected to implement recommendations to strengthen the process for appointing members to the supervisory boards of state-owned companies. By the end of March, it should adopt a package of tax measures for 2026–27 and appoint a new permanent head of the State Customs Service. These are the three immediate structural benchmarks of the new Extended Fund Facility (EFF) program with the International Monetary Fund.
According to the text of Ukraine’s memorandum on economic and financial policy, published by the IMF on its website on Friday, there are a total of 12 benchmarks. One benchmark from the previous program remains: any non-systemic banks that become state-owned will not be recapitalized using budget resources and will be transferred to the Deposit Guarantee Fund for resolution if prudential requirements are violated, as the National Bank recently did with PIN Bank and MotorBank.
Regarding tax changes, the memorandum notes the elimination of tax benefits for imports via low-value postal parcels; the removal of VAT exemptions for simplified taxation regimes by introducing mandatory VAT registration from January 1, 2027, for simplified taxpayers whose turnover exceeds the general VAT registration threshold.
“We will eliminate opportunities to abuse the simplified taxation system (ST) to evade income taxes… The threshold will be raised moderately but will not exceed UAH 4 million,” the memorandum submitted by the Ukrainian side states.
In addition to submitting to parliament a draft law amending the definition of “employment” in the Labor Code, which was a prior action of the program, the plan also includes strengthening oversight of this definition by the labor inspection; applying new employment rules to prevent evasion of personal income taxes linked to undeclared employment; and submitting amendments to the Tax Code in 2026 to exclude certain high-risk activities from the second group of simplified taxpayers (including IT services, accounting and auditing consultancy, marketing, engineering, and legal services) and to introduce higher differentiated rates for such activities for the third group of taxpayers.
“Furthermore, digitalization and better data integration, including through our new ‘Obriy’ system, will help address the problem of informal employment,” the memorandum states.
Regarding the strengthening of the appointment process for supervisory board members of state-owned companies, the memorandum calls for changes to the structure of the nomination committee by a Cabinet of Ministers decree based on IMF recommendations. The decree will require all committee members to adhere to strict confidentiality rules, allow citizenship to be considered only as a secondary factor among equally qualified candidates, strengthen evaluation procedures through pre-agreed interview questions and draft evaluation exchanges prior to interviews, develop annual performance assessments of supervisory boards for the Ministry of Finance, link reappointment to assessment results, and require the Ministry of Finance to maintain a database of top-rated candidates from previous selection processes for future vacancies.
By the end of June 2026, amendments to the Tax Code must be submitted to parliament, including aligning transfer pricing rules with OECD standards and implementing Article 4 of the EU ATAD. The updated state-owned enterprise strategy must also be approved, reflecting privatization goals and extending protections under Article 7 of the Law on Banks and Banking to all systemically important state banks.
The same deadline applies to two other benchmarks: implementing a critical third-party risk oversight system and having the National Agency for Prevention of Corruption (NAPC) issue new rules establishing a risk-based asset declaration verification system, prioritizing high-ranking officials in identified high-risk areas.
By the end of July, a technical analysis must be published that quantitatively assesses the costs of current QFA subsidies in electricity, gas, and heating, the frequency of existing subsidies, and financially sustainable reform scenarios for gradual cost recovery while ensuring adequate protection for vulnerable consumers, taking into account IMF technical assistance to the Ministry of Energy.
The final three structural benchmarks are due by the end of December this year: creating a centralized data repository project for tax and customs administrations; strengthening the structures and decision-making processes of the National Securities and Stock Market Commission (NSSMC) through amendments to the NSSMC law to align governance with the Constitution and implement a two-tier management structure, including a supervisory board with clearly defined roles and responsibilities; and appointing all members of the Accounting Chamber from vetted candidates according to legislative amendments by the end of 2024.
It is noted that by the end of April this year, an Advisory Expert Group (AEG) must be established, and six members appointed. Its task will be to vet candidates for membership in the Accounting Chamber.
