12 problems for Ukraine from the IMF: the land market, the monetization of subsidies and raising the retirement age

12 problems for Ukraine from the IMF: the land market, the monetization of subsidies and raising the retirement age


The Fund needs to reduce the number of officials, to fight corruption more actively and to carry out reforms.
Ukraine and the international monetary Fund updates the Memorandum on cooperation and put new paragraphs. Kiev had pledged to undertake pension and land reforms, to reduce the number of civil servants and state employees, to cancel the “simplified taxation” in the taxation of business.

It will need to perform to receive future tranches. And tasks to receive the next tranche of 1 billion dollars already fulfilled – nationalized “PrivatBank” and adopted the state budget for 2017. About it writes “Economic truth”.

“The mission of the International monetary Fund in coming weeks to recommend to the Board of Directors of the Fund to conduct a third review of the EFF program,” – said the official representative of the Fund Jerry rice.

12 tasks for Ukraine to receive tranches from the IMF:

1. Until the end of January 2017, the Cabinet should approve a mechanism of monetization of the subsidy and encourage people to save energy.

2. Until the end of March 2017 Ukraine should adopt a new pension reform. Gradually increase the retirement age: for men, for four months every year, starting in July 2017; for women – six months after 2021, up to that time, while for men and women, the retirement age reaches 63 years in the 2027th.

3. Until the end of March 2017 should adopt the law on market of agricultural land, which would include the abolition of the moratorium on the sale and the mechanism of the future sale.

4. Until the end of 2017 Ukraine should choose an international company with good business reputation, who will conduct an audit of “PrivatBank”. Must check the Bank’s activities over the last six months prior to nationalization.

5. Until the end of June 2017 have to choose international auditor for evaluation of the implementation of shareholders of the “PrivatBank” terms of the restructuring. The company must assess whether the terms of the restructuring to offset losses on loans issued to related parties.

6. Until the end of June 2017 , the creation of a unified register of recipients of social payments, to continue verification process.

7. Until the end of June – creating a legislative framework for anti-corruption courts.

8. Instead of the current tax police should be established, the financial police until the end of April 2017. Judging from written out in the draft Memorandum of characteristics that this body should be created according to the model proposed by the Ministry of Finance.

9. The state fiscal service is able to access Bank accounts of Ukrainians to be able to use indirect methods of assessment of the income of citizens. Such rights of GFS can get to the end of June 2017.

10. The Ukrainian side should commit to refrain from any steps towards the preservation or creation of tax benefits. In particular, we are talking about the fact that the government refrains from introducing a preferential tax treatment in industrial parks, is not yet to create an export credit Agency, and will cancel the simplified tax system from January 2018.

11. Ukraine should more actively pursue privatization of state enterprises. In particular, needs to sell the Odessa port plant, as well as to initiate the process of privatization of large goobject: “State food and grain Corporation of Ukraine”, “Turboatom”, “Centrenergo” power companies. It is also expected to approve legislation which will allow to sell “Ukrspirt”.

12. The Ukrainian side will agree to the revision of the law on civil service, as well as reducing public sector employees and civil servants. In 2017, the number of state employees are planning to reduce to 4% and in the medium term – until the end of 2019 – more than 10%.

We will remind, meeting of the IMF on the allocation of Ukraine the fourth tranche will happen in a few weeks.