IMF demands cancellation of parcel benefits already in July: what other tax changes await Ukrainians under the updated memorandum

In July 2026, the Executive Board of the International Monetary Fund completed the first review of the 48-month Extended Fund Facility (EFF) program for Ukraine. The basis of this cooperation was the Memorandum on Economic and Financial Policies (MEFP), which, together with the Letter of Intent, records the commitments of the Ukrainian authorities in exchange for financial support of about USD 2.2 billion (total disbursements to date).

The Memorandum (MEFP) is a document concluded between Ukraine, represented by the President, Prime Minister, Minister of Finance, and the Head of the National Bank of Ukraine, and the International Monetary Fund.

Another important document is the IMF Report on Ukraine No. 26/188, prepared by IMF experts and approved by the IMF Executive Board on July 20, 2026, following the first review of the Extended Fund Facility program and consultations under Article IV of the IMF Statute.

The document package includes the IMF press release, Staff Report, Information Annex, Supplementary Information, and the Statement of the Deputy Executive Director for Ukraine.

It is in this report that the updated Memorandum on Economic and Financial Policies (MEFP) and the Letter of Intent dated July 2, 2026, signed by the Ukrainian leadership, were published.

The document assesses Ukraine’s fulfillment of the conditions of the four-year EFF program and contains a list of structural reforms in tax policy, anti-corruption, public financial management, energy, public administration, and European integration.

In addition to the MEFP, the report also features another important document — the Memorandum of Understanding with the Group of Ukraine Creditors (GCU), signed in April 2026.

What the Memorandum Provides: Key Commitments of Ukraine

The updated Memorandum defines the reforms Ukraine commits to implement under the EFF program to receive subsequent IMF financing tranches.

Tax and Fiscal Policy

The Memorandum envisages measures to reduce the shadow economy and expand the tax base. In particular, Ukraine has committed, among other things, to prepare a reform of the simplified taxation system, which includes the cancellation of VAT exemption for single tax payers if their turnover exceeds the mandatory VAT registration threshold. The implementation of this reform is planned by April 2027.

Monetary Policy and the National Bank

The document confirms the course to preserve the independence of the National Bank of Ukraine. The NBU will continue the policy of managed flexible exchange rate to support macroeconomic stability and reiterates the refusal of monetary financing of the state budget, except in emergencies related to critical delays in international aid.

Energy Sector

The IMF notes that for financial stabilization of the energy sector, Ukraine must gradually move to economically justified tariffs for gas, electricity, and heat supply. Before adopting such decisions, the government must develop social protection mechanisms for vulnerable population groups. The relevant analysis is planned to be completed by October 2026.

Anti-Corruption Policy and Public Administration

Among the key structural milestones are also defined:

• introduction by the National Agency on Corruption Prevention of new risk-oriented rules for declaration checks with priority for high-ranking officials (by the end of September 2026);
• completion of the reform of the Accounting Chamber by appointing new members on a competitive basis (by December 2026).

Important: The Memorandum is not a law and does not mean automatic implementation of all the mentioned changes. Most of them will require adoption of separate laws by the Verkhovna Rada or decisions by the Cabinet of Ministers. The document only defines Ukraine’s commitments to the IMF under the Extended Fund Facility (EFF) program.

Major Postponement

The most important news for small and medium businesses is the change in the schedule of the simplified taxation reform:

The cancellation of VAT exemption for single tax payers whose turnover exceeds the registration threshold is postponed to April 2027 (effective from January 1, 2028).

The authorities need an additional year to carry out the administrative reform of the State Tax Service and reduce compliance costs, which are currently too high for small businesses.

By the end of December 2026, a law on anti-splitting — against business fragmentation and limiting the use of the simplified system to conceal employment relationships — is planned to be submitted.

The IMF also insists that before increasing tax pressure, the state must simplify administration.

It is planned to raise the threshold for unscheduled VAT refund audits from UAH 100,000 to UAH 1,000,000 (deadline — August 2026).

The goal is to reduce the number of blocked invoices to less than 0.08% of the total number per month.

The State Tax Service is working on simplifying declaration forms and introducing a pre-filled tax reporting service for small businesses based on cash register data.

After the end of martial law, the 5% military levy rate should remain in effect for another three years. However, the authorities are already considering options to replace it with a special "Reconstruction Tax" to maintain budget revenues during the transition period.

What’s next: financing and subsequent program reviews

Financial Support from Partners

The IMF notes that Ukraine has confirmed sources of external financing for the coming years. In particular, this concerns the Ukraine Support Loan (USL) from the European Union, which provides up to EUR 90 billion in support in 2026–2027.

Additionally, the initiative of the G7 Extraordinary Revenue Acceleration (ERA) countries continues, under which Ukraine is expected to receive about USD 37 billion. Financing is provided from future revenues from frozen Russian sovereign assets.

Next IMF program reviews

The Extended Fund Facility (EFF) program provides for regular reviews of Ukraine’s fulfillment of commitments.

Currently planned are:

• second review — in autumn 2026 based on program performance indicators as of the end of June 2026;
• third review — in December 2026 based on the results of structural milestones and macroeconomic indicators as of the end of September 2026.

The results of these reviews will determine the IMF’s decisions on allocating the next tranches of financial assistance to Ukraine.

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