IMF prevents Ukrainian President from submitting bill on the tax on capital withdrawal from Ukraine

Ukrainian President Petro Poroshenko has decided to postpone the submission of the bill introducing tax on withdrawn capital to the Verkhovna Rada in light of to the International Monetary Fund’s (IMF) stance, Deputy Head of Presidential Administration Dmitry Shymkiv reported.
Shymkiv referred to the bill’s text on the president’s website.

“Yesterday during the business meeting, there were great expectations that the President would submit to the Verkhovna Rada of Ukraine (VRU) the bill on withdrawn capital tax… At the start of March all of the work [to draft the bill] had been completed. And on the 7th of March, the official submission of the bill to the VRU was planned. The day before the meeting, we receive a harsh letter from the IMF…  the business meeting is postponed to the 12th. As a result of the discussions, the decision is made to look for broader support, and to work more carefully to convince the IMF,” he wrote on Facebook.

Shymkiv called on supporters of the tax on capital withdrawal to help the Presidential Administration to convince the IMF and other international partners, as well as investors and transnational corporations, of the importance of the tax.

“We have not lost this fight, we just need to pause, because in the present situation the IMF’s role in carrying out reform is very important,” he concluded.

During a business meeting on March 12, Poroshenko announced that he does not intend to submit the bill on the tax on capital withdrawal, but instead plans to initiate a second discussion of it.

Previously the president said that the replacement of the tax on profit with the tax on withdrawn capital is one of the priorities for 2018.

According to the bill, withdrawn capital will be taxed at 15% for dividends and 20% for equivalent payments.

  IMF, Ukraine, withdrawn capital tax