Ukraine to Retry IMF-Linked Parcel Tax Bill as Budget Deficit Widens

Ukraine's parliament is set to make another attempt next week to pass a bill introducing value-added tax on parcels sent from abroad, a measure that has become a critical condition for continued International Monetary Fund (IMF) support.

The vote is seen as a key test of the legislature's ability to deliver reforms at a time when the country faces a severe budget crunch in the fifth year of its war with Russia. With a projected deficit exceeding $32 billion this year, Ukraine is under pressure to accelerate reforms required by its international lenders to secure funds for economic stability and social payments.

The proposed legislation, which would impose VAT on parcels valued under €150 ($175), has proven contentious. Lawmakers failed to pass it in the first reading last week. Danylo Hetmantsev, head of the parliamentary committee for finances, taxes and customs, said the government plans to resubmit the bill on Monday, with a review expected later in the week.

The renewed push follows an IMF mission's visit to Kyiv last week for scheduled talks on the funding review. Lawmakers described the discussions as complicated, with the mission making clear that no exceptions would be made regarding the bill.

Parliament's chairman, Ruslan Stefanchuk, stressed to lawmakers on Monday that critical bills must be passed. "Decisions on which international assistance to Ukraine and the stability of the state budget depend cannot wait," he said, echoing calls from President Volodymyr Zelenskiy.

For over a year, Ukraine has struggled to approve reforms necessary to unlock funds from international backers. Opposition lawmakers often cite populism, poorly drafted legislation, and a disregard for priority issues as reasons for their resistance.