EU to require tax reform from Ukraine in exchange for macro-financial aid under €90bn loan

Ukraine will be required to implement tax reform and maximise domestic budget revenues as part of the conditions for receiving further tranches of macro-financial assistance under the EU's €90 billion loan, although details and timing remain under discussion.

Source: Valdis Dombrovskis, European Commissioner for Economy and Productivity, Implementation and Simplification, after the EU Economic and Financial Affairs Council meeting on 5 May, as reported by European Pravda from Brussels

Details: The EU plans to formalise tax reform in Ukraine as one of the conditions for receiving the macro-financial component of the €90 billion assistance programme.

"We're currently still in negotiations in very advanced stages with Ukrainian authorities on conditionality underpinning our macro-financial assistance programme," Dombrovskis said.

Given that negotiations with Ukraine are ongoing, the official declined to provide further details but confirmed that tax reform is part of the EU's requirements.

"Domestic revenue mobilisation is an important part of those negotiations, as is tax reform, but exact modalities and elements are still under discussion," the commissioner added.

Background:

• The EU is setting tighter reform conditions for Ukraine to receive macro-financial tranches, including the introduction of unpopular changes to business taxation.
• The Financial Times reported that Kyiv is resisting Brussels' call to raise business taxes as a condition for receiving part of the €90 billion in assistance.

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