The IMF recommends increasing several tax rates to satisfy Ukraine’s 2026 state budget.

At the 2025 Spring Meetings in Washington, the IMF provided Ukrainian government officials with various recommendations on addressing the state budget for 2026. It is noted that representatives from Ukraine and the IMF discussed tax increases, particularly regarding VAT rates and transitioning to a progressive personal income tax scale, which entails higher tax rates for individuals with high incomes. The “luxury tax” was also briefly mentioned.

However, much of the discussion was focused on the shadow economy. The IMF is concerned about potential tax evasion through a simplified system. No specifics were discussed regarding when and how tax rates might be altered.

“We have a potential additional resource even without raising taxes in 2025. We were already focused on 2026,” the Ministry of Finance commented on communications with the IMF, adding that the full confiscation of frozen Russian assets in Ukraine’s favor was discussed.

Additionally, the head of the Ukrainian Parliament Finance Committee, Danylo Hetmantsev, clarified that there is currently no discussion about raising VAT at all.