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Ukraine risks losing IMF support over tax reform delay: FinMin

Xinhua, November 10, 2015 Adjust font size:

Ukraine's Finance Minister Natalie Jaresko warned Monday that Kiev may lose financial support from the International Monetary Fund (IMF) if it further delayed the implementation of a taxation reform envisaging elimination of privileges for agribusiness.

"If we do not solve the issue of the value-added tax payments for agricultural sector, we will drop out from the IMF reform programme," Jaresko said at a meeting of the U.S.-Ukraine business council in Kiev.

She said Kiev's failure to adopt the taxation reform by the end of the current year would cost the state budget an additional 500 million U.S. dollars, which would not ensure the reduction of the budget deficit agreed with the IMF.

Ukraine has undertaken a commitment to slash the gap in its 2016 budget to 3.7 percent of the gross domestic product under IMF's four-year 17.5-billion-dollar bailout program designed to facilitate economic reforms in the East European country.

The special tax regime for agribusiness, which has been in place in Ukraine since 1998, stipulates that Kiev compensates the value-added tax to some agriculture producers and exporters from the state budget. Endit