Getmantsev warned of budget problems even with 100% financing from partners

A "very difficult" and "alarming" situation has developed in Ukraine with public finances, and budget problems will remain even if all already confirmed funds from international partners are received. This was stated by the head of the parliamentary committee on finance, tax and customs policy, Danylo Getmantsev.

Among the reasons, he named the failure to meet the revenue side of the budget, the slowdown of the economy, and a number of, in his words, ill-considered decisions in defense and other spheres.

"The failure to meet the budget on the revenue side, some, to put it mildly, ill-considered decisions in the defense sphere, but not only, an objective slowdown in economic development have led to the fact that problems will exist even with 100% fulfillment of all our obligations and receipt of all confirmed money," -Getmantsev wrote.

Fresh data on budget execution partially confirms problems with revenues. According to KSE Institute calculations, in July, the general fund of the state budget received 165.8 billion UAH - 102.4 billion UAH, or 38.2%, less than the monthly plan. The main part of the deviation is associated with the non-receipt of planned 89.7 billion UAH of international grants, but also lower than planned were receipts of personal income tax, domestic and import VAT, and rent payments.

Against this background, Getmantsev called on the Verkhovna Rada during the current plenary week to fulfill Ukraine's international obligations. According to him, failure to fulfill any condition of the memoranda with the IMF or the European Union may further worsen the financial situation.

"We must vote for all obligations this plenary week. And finally forget about politics a step away from the abyss," -the deputy stated.

Getmantsev in his post did not specify which bills he means. At the same time, after the July revision of the EFF program, Ukraine has a number of tax, budget, pension, and energy obligations to the IMF.

What IMF requirements does Ukraine need to fulfill

One of the nearest blocks concerns taxes. As previously written by "Kurs Ukrainy", after failing to fulfill the previous structural benchmark, the IMF divided the tax package into several stages.

• Ukraine must complete the implementation of taxation of income received through digital platforms and cancel the tax benefit for small international parcels.
• By the end of 2026, the authorities must submit bills against abuse of the simplified system, in particular artificial splitting of business and use of sole proprietors instead of labor relations.
• By the end of April 2027, VAT reform must be adopted for a part of simplified system payers, and it should come into force from January 1, 2028.

In addition, the memorandum provides for a contingency mechanism in case of new budget shocks or the emergence of additional unfunded expenditures. One possible instrument for increasing revenues is named as an increase in the main VAT rate. This does not mean that the decision to increase has already been made: it is defined precisely as a potential backup measure.

A separate block concerns energy. The IMF expects Ukraine to prepare a plan for a gradual transition to market tariffs for gas and electricity. In the updated program, the deadline for preparing such a plan is postponed to the end of October 2026, and by the end of February 2027 the authorities must assess social protection mechanisms for consumers. The Fund allows the gradual increase of tariffs from 2027 on condition of targeted support for vulnerable households.

Another constant obligation concerns pensions. Ukraine agreed with the IMF not to adopt, without consultations with the Fund, decisions that create additional expenditures for the Pension Fund beyond the approved budget. This applies primarily to unscheduled pension increases and does not limit the usual annual indexation according to the legally established formula.

The IMF itself, following the July program review, noted that Ukraine's economic prospects worsened due to intensification of Russian strikes on critical infrastructure and external shocks. The Fund also noted delays in implementing some structural reforms and stressed that timely fulfillment of agreements with the IMF and the EU is necessary to unlock further external financing.

Based on materials from: Danylo Getmantsev, IMF, KSE Institute