Ukraine Proposes 4 Million Hryvnia VAT Threshold for Sole Traders in IMF Negotiations

IMF Demands on Ukraine

According to ХВИЛЯ: As part of negotiations for over $8 billion in funding, the International Monetary Fund (IMF) is demanding that Ukraine impose a value-added tax (VAT) on sole proprietors with an annual income exceeding 1 million hryvnias. The key point of contention is the specific annual income threshold at which this tax would apply. This push is part of broader IMF-backed reforms aimed at broadening the tax base and increasing state revenue.

The Ukrainian Ministry of Finance has prepared a corresponding draft law, but its submission to the government has been postponed until February 10. President Volodymyr Zelenskyy has expressed dissatisfaction to Finance Minister Serhiy Marchenko regarding the pace of meeting these demands. In turn, David Arakhamia, head of the 'Servant of the People' parliamentary faction, noted that the authorities are leaning towards setting a threshold of 4 million hryvnias, which is significantly higher than the IMF's initial demand.

Parliamentary Debates

This situation has sparked debate in the Ukrainian parliament, especially as the Verkhovna Rada recently approved the state budget for 2026, which could affect the implementation of IMF conditions. Information about these discussions was published on February 6, 2026, by Bloomberg.

It is worth noting that a month prior, IMF Managing Director Kristalina Georgieva visited Kyiv, underscoring the active nature of the negotiation process.

Thus, the issue of introducing VAT for sole proprietors remains a focal point for the Ukrainian government, driven by the demands of international creditors and internal political debates. Ukraine must find a compromise to meet the IMF's conditions and ensure stable funding amid ongoing economic challenges. This matter will undoubtedly influence the future development of the country's economic policy and its relations with international financial institutions.