Ukraine’s Prime Minister Yulia Svyrydenko said the government is reconsidering a proposed tax on self-employed workers after discussions with the International Monetary Fund, which described the idea as “not constructive.”
The proposal involved introducing value-added tax (VAT) on self-employed individuals as part of a wider set of economic reforms linked to an $8 billion loan agreement approved earlier this year. However, Ukrainian officials have increasingly raised concerns about the political and social impact of such a move.
Speaking after meetings in Washington, Svyrydenko said international partners acknowledged that the issue is highly sensitive in Ukraine. She noted that both IMF and European officials showed understanding of the challenges involved in implementing the tax.
The Ukrainian government had already warned that the measure could face strong public opposition and would likely struggle to gain enough support in parliament. Many lawmakers believe the policy could place an additional burden on small business owners and freelancers at a difficult time for the country’s economy.
As a result, Kyiv is now looking at alternative ways to increase government revenue without introducing the controversial tax. Svyrydenko said discussions with international partners will continue to find other solutions to support the national budget, especially for the coming years.
Despite the latest developments, some Ukrainian legislators have suggested that the proposal has not been fully abandoned. Instead, they believe the decision may have been delayed, leaving the possibility open for future consideration.
The situation highlights the balancing act Ukraine faces as it works to meet the conditions of international financial support while also managing domestic economic pressures. With ongoing financial needs and political sensitivities, the government is expected to continue negotiations to find a workable path forward.
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