IMF Mission Starts Work in Kyiv as Ukraine Misses Some Summer Reform Deadlines

An International Monetary Fund mission, led by Gavin Gray, the Fund’s mission chief for Ukraine, started meetings on Monday with Ukrainian authorities and other stakeholders as part of a staff visit, the IMF’s Representative Office in Ukraine told Kyiv Post in an official letter. Discussions will focus on the outlook for Ukraine’s economy, the government’s macroeconomic and structural reform commitments under the IMF’s Extended Fund Facility (EFF), and the 2027 draft state budget. JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official.The Fund’s formal notice came three days after Ukrainian lawmaker Yaroslav Zhelezniak wrote in his Telegram post that the mission had already touched down. In a Telegram post published Aug. 28, Zhelezniak wrote: “Starting Friday (August 28), the IMF mission is arriving in Ukraine again. It will be assessing progress (or rather its absence) throughout next week.”The visit opens the first review of Ukraine’s four-year, $8.1 billion EFF program, as Kyiv has fallen behind on several prior actions and structural benchmarks due before the end of summer, according to the Fund’s First Review Memorandum table.During the second review in September, the Fund must pin down the size of Ukraine’s 2027 financing gap together with Ukrainian officials. “I am pretty sure there will be a need for additional money, given Russia’s continued attack on Ukrainian infrastructure,” the well-informed source told Kyiv Post back in an exclusive article published in June. Other Topics of Interest NBU Will Interview Sense Bank Chief, Opens Board-Wide Suitability Probe NBU will interview Sense Bank's CEO over his professional fitness and has opened a probe into the entire supervisory board, citing a hidden management structure. Fiscal and Tax ReformsTwo consequential fiscal commitments due by the end of June slipped. Amendments to the Tax Code aligning Ukraine’s transfer pricing rules with OECD standards and implementing Article 4 of the EU’s Anti-Tax Avoidance Directive were not submitted to Parliament on time; the tracking table shows the item proposed to be reformulated as a new structural benchmarkA related Tax Code package, reforming transfer pricing and interest limitation rules, falls due by the end of August, just as the mission’s meetings begin. So does a bill raising the threshold that triggers unscheduled audits on VAT refund requests and negative VAT liabilities from Hr.100,000 ($2,245) to Hr.1 million ($22,446). A third fiscal item – legislation taxing income earned from digital platforms and scrapping the tax exemption on low-value postal imports – is not met since Ukraine’s president Volodymyr Zelensky has still not signed the relevant bill voted by Ukraine’s parliament. Financial sector and governanceUkraine’s central bank, the National Bank of Ukraine (NBU), did not publish any official information confirming that a critical third-party risk oversight framework for the financial sector had entered into force by the end of June, as required under the IMF’s checklist. On June 30, the Cabinet of Ministers adopted a resolution to update the Main (Strategic) Directions of Activity for Public-Sector Banks, which carried the same end-June deadline.Ukraine’s first review under the $8.1 billion EFF cleared the IMF’s Executive Board in June, but only after the Fund again backed off a tax condition.Parliament had passed just one of four required tax bills – an extension of the military levy – while a tax on digital-platform income sat unsigned by President Volodymyr Zelensky, a simplified VAT measure was never submitted, and a bill introducing VAT on parcels under €150 ($176) stalled in committee despite being registered. The IMF approved the $685.5 million tranche anyway, even as Russian strikes on Kyiv disrupted the mission’s visit, with people familiar with the talks describing the Fund as frustrated but willing to show flexibility given the war – a leniency they cautioned would not last indefinitely into the program’s next review. Olena Hrazhdan is the Business Reporter at Kyiv Post, covering Ukraine’s markets, business, and economic policy. While she reports broadly on economic issues, her core focus is banking, finance, monetary and fiscal policy. Olena previously wrote for leading Ukrainian business media and became a Fellow of the International Monetary Fund’s Journalism Fellowship in 2024.