IMF advises Ukraine to redouble efforts on domestic revenue mobilization by expanding tax base

MOSCOW. Oct 24 (Interfax) - Redoubling efforts on domestic revenue mobilization and completing the restructuring of Ukraine external commercial debt in line with program commitments are key conditions for successfully reducing Ukraine's sovereign debt, Deputy Director of the International Monetary Fund's (IMF) Fiscal Affairs Department Era Dabla Norris said at a press briefing in Washington on Wednesday.

"[...] the [Ukrainian] authorities need to continue to restore debt sustainability. And in this regard, there is two important aspects. The first is to complete the restructuring of external commercial debt in line with program commitments. And the second is to really redouble efforts on domestic revenue mobilization and to accelerate the implementation of their national revenue strategy," Dabla Norris said.

This strategy is not only about aiming to raise revenues, mobilize revenues, but to fundamentally change the tax system, reduce tax evasion, tax avoidance, and enhance the fairness and equity of the tax system, she said.

"And the IMF has long advocated for countries that it is not about raising rates. It is about broadening the base and making tax systems as fair and equitable as possible," she said.

The IMF published its Global Financial Stability Report on Wednesday, saying that in 2024 global public debt is projected to exceed $100 trillion, which is equivalent to 93% of global GDP, and will rise over the medium term, reaching 100% of global GDP by 2030. According to IMF representatives, this is due to weak economic growth, the tightening of financial terms, and geopolitical and political uncertainty, which can add to debt risks.

"This applies to Ukraine as it does to many other countries. And in the case of Ukraine particularly, the outlook, as you know, remains exceptionally uncertain," Dabla Norris said.

According to the document, the IMF expects Ukraine's sovereign and government-guaranteed debt to stand at 95.6% of GDP in 2024, at 106.6% of GDP in 2025, at 107.6% of GDP in 2026, and at 102.6% of GDP in 2027, declining to 98.5% of GDP in 2028, and to 94% of GDP in 2029.