Ukraine fails to meet all benchmarks under new IMF program in Q1 2026
MOSCOW. April 1 (Interfax) - Three structural benchmarks that Ukraine was supposed to meet by the end of March 2026 under the International Monetary Fund's (IMF) Extended Fund Facility (EFF) program remain unfulfilled, Ukrainian media reported, citing data on the RRR4U consortium website.
Ukraine was supposed to step up the nomination process for members of state-owned banks' supervisory boards by the end of February 2026, the consortium's presentation shows.
By the end of March, the Verkhovna Rada was supposed to adopt tax changes regarding the abolition of the VAT exemption for the simplified tax system, the taxation of digital platforms, the taxation of all parcels, and the permanent imposition of the military tax. Although the government approved and submitted three bills on March 30 regarding the taxation of digital platforms, taxation of all parcels, and the permanent implementation of military tax, one bill on VAT for sole proprietors remains pending revision. Structural benchmarks require an approval by the parliament and since this has not occurred, they are not considered fulfilled.
Another structural benchmark, the deadline for which expired in March, is the appointment of the head of the Ukrainian State Customs Service following a competition.
The committee submitted the candidacies of Ruslan Damentsov and Orest Mandziy for consideration by the Finance Ministry following a vote, chair of the selection committee for the Ukrainian Customs Service head Kunio Mikuriya said in an interview with Ukrainian media. After considering the candidates, the ministry should submit a proposal for the candidate to the government.
"As of March 31, he hasn't been appointed yet, but we know that sometimes important political decisions could be made late in the evening. Therefore, we (the RRR4U consortium) haven't designated this benchmark as unfulfilled, but there's a high risk that it will not be fulfilled," leading expert at the Institute for Economic Research and Policy Consulting Alexandra Betliy said at a RRR4U consortium presentation of the monthly monitoring of the implementation of the IMF program's conditions and Ukraine's Plan under the Ukraine Facility on Tuesday.
As for the obligations stipulated in the memorandum with the IMF, Ukraine is adhering to its commitment not to impose additional currency and import restrictions. The government has timely approved a procedure for developing, monitoring and evaluating strategies that form the basis for formulating proposals for public investment.
However, the government has failed to adopt the Key Performance Indicators (KPI) for the head of the State Migration Service by the end of February 2026 and has not submitted to parliament a bill to improve the integration of public investment management into medium-term budget planning and fiscal risk management. The government also failed to submit to parliament a bill amending management approaches in the Deposit Guarantee Fund (DGF), with its deadline expired at the end of March, as well as a bill on changes to securitization and mortgage bonds.
The Finance Ministry was also supposed to publish a report on the status of implementing the National Revenue Strategy, but as of late March, the corresponding report was not available on the Finance Ministry's website. Parliament still lacks a bill creating a legal framework for the implementation of a vertically integrated market infrastructure, which was supposed to be approved by the end of February 2026.
Furthermore, the government has not repealed its resolution to restore independent assessment of supervisory boards. Ukraine has failed to meet its promise to fill vacant positions on the Council of the National Bank of Ukraine (NBU) and appoint an internationally recognized financial advisor to prepare for the sale of Sense Bank and Ukrgasbank, while both obligations were supposed to be met by the end of March 2026.
As reported, on February 26, 2026, the IMF approved a new four-year EFF program for Ukraine totaling $8.1 billion. Given the protracted crisis, this replaced the previous four-year $15.6 billion program, which was launched in March 2023 and under which the country had received nine tranches totaling $10.6 billion. The Ukrainian state budget has already received the first tranche of the new program, $1.5 billion.
To receive the second tranche of $0.69 billion, Ukraine had to adopt a package of tax measures by the end of March 2026, mandating the registration of simplified tax system payers with an annual income of over UAH 4 million as VAT payers, effective January 1, 2027. The Finance Ministry's initial proposal regarding the UAH 1 million threshold was revised following a wave of criticism from the business community and a successful petition filed on the government's website. The government has not yet even submitted this bill to the Verkhovna Rada.
Furthermore, on March 10, parliament turned down a bill on taxation of income received through electronic platforms, which was also part of the agreement with the IMF, as only 168 parliament members voted in favor, while the required minimum was 226 votes.
