Photo from UNIAN
The IMF's position is to ensure financial stability in Ukraine, albeit by curbing possible economic growth.
Executive Director of Centre for Economic Strategy (CES) Hlib Vyshlinsky says the draft law on the introduction of exit capital tax could be adopted only if the Cabinet of Ministers and the International Monetary Fund (IMF) reach an agreement on changing the enterprises' tax base.
"We realize that the current program with the International Monetary Fund directly limits the possibility of changing the businesses' tax base, their financial results. The adoption of this bill will become realistic only if an agreement is reached between the IMF and the government," he told a briefing on February 5.
According to the expert, the main standoff is between businesses seeking to pay fewer taxes and supporting the initiative, and Finance Ministry together with the IMF, which, by restraining possible economic growth, are willing to ensure the country's financial stability.
Read alsoPoroshenko not going to give up idea of exit capital tax
As UNIAN reported earlier, Ukrainian President Petro Poroshenko on October 31, 2018, said at a meeting with businesses' envoys he did not intend to abandon the idea of introducing exit capital tax. According to Poroshenko, if earlier the IMF unequivocally opposed the introduction of such a tax in Ukraine, now it perceives this idea more positively. To address the issue, compensatory mechanisms need to be developed and budget risks assessed.
At the same time, Ukraine's key lender, the International Monetary Fund, opposed the introduction of the new tax without compensation for budget losses.
According to experts, the introduction of exit capital tax instead of the existing corporate profit tax in Ukraine in the first year would lead to UAH 37 – UAH 47 billion (US$1.3 – $1.7 billion) in budget revenue losses, accounting for 1.2% to 1.5% of GDP.
The Ukrainian Finance Ministry considers it realistic to implement exit capital tax instead of the existing corporate profit tax from 2019 – without a threat to Ukraine's fiscal sustainability – so far only for small- and medium-sized businesses with an annual revenue of up to UAH 200 million ($7.3 million).