EU may tie financial aid to Ukraine to taxation of foreign parcels — Bloomberg

The European Union is considering linking part of its macro-financial assistance to Ukraine to the adoption of legislation on the taxation of foreign parcels. Bloomberg reports this, citing sources familiar with the negotiations.

This is part of a financial support package worth 90 billion euros. According to the agency, the tax condition will apply to the macro-financial loan of 8.4 billion euros.

What is the demand made on Ukraine

According to Bloomberg, Ukraine must expand the list of foreign parcels that will be subject to a 20 percent value-added tax.

As noted, EU member states have already agreed on the terms of the macro-financial assistance program on May 18.

European Commissioner for Economy Valdis Dombrovskis said that the new program should strengthen Ukraine’s financial stability and support anti-corruption and economic reforms.

When Ukraine can receive funds

The first tranche of assistance is planned to be provided in June, the second in September, and the third by the end of 2026 after the implementation of the agreed reforms.

Bloomberg also notes that the requirement to tax parcels meets the conditions of the International Monetary Fund program within the framework of financial support for Ukraine.

Why the initiative is controversial

The tax reform has already caused public resonance and criticism in Ukraine. According to one of the people’s deputies, the Verkhovna Rada may not have enough votes to adopt the relevant bill, since at least 226 votes are needed to support it.

The spokesman for the Ministry of Finance of Ukraine, Dmytro Gerasimenya, reported that the government continues to work on the final terms of the agreement with the EU before its ratification by the parliament.

In addition, according to the agency, the EU and the IMF agreed to postpone another tax reform for another year, which provided for the expansion of the circle of entrepreneurs who are VAT payers.