Ukrainian Parliament Approves 02 Bills Facilitating Foreign Grants.

Kyiv; April 2026: A prevailing crisis in the Ukrainian Parliament for the past few months had impeded the receipt of loans in billions from the European Union, World Bank, and the International Monetary Fund (IMF).

Yesterday, on 08th April 2026 – the Parliament had approved one IMF-linked tax bill, thereby extending the military tax for three years after martial law ends. Today his morning, it passed another measure tied to the $8.1 billion IMF program, introducing a tax on digital platforms.

A third bill, on parcel taxes, has not been tabled as yet; the controversy that is looming over the financial architecture (as deemed quintessential by IMF) of Ukraine is the addition of VAT (Value Added Tax) for self-employed entrepreneurs (a simplified tax status known as FOP in Ukrainian) — isn’t even being considered yet. It first has to be approved by the Cabinet of Ministers before it can go to parliament for a vote.

The status is widely used by Ukrainian businesses and individuals, in large part to optimize taxes (or depending on how you look at it, avoid them). Retail, IT, and service industries — including cafes and beauty salons — rely most on the FOP system in Ukraine. The International Monetary Fund wants to add VAT for FOPs earning above a certain threshold to raise revenue for the war effort and to formalise the economy by bringing businesses out of the shadows. Seems logical, but many (if not most) see the proposal as deeply unpopular.

IMF’s insistence for the addition of VAT is very much time-centric. In its Ukraine staff report from February 2026, the IMF acknowledges that the simplified tax system was introduced in the late 1990s to “encourage formalisation by shielding small and medium-sized businesses from a highly complex general tax system and from a corrupt revenue service and tax police”.

Since then, however, the general tax system has been streamlined, the tax police have been replaced by the more independent Economic Security Bureau, and the public perception of government at the country’s tax service has improved, the report says. In theory, that all should have reduced the need for the simplified system. Instead, the IMF argues, the FOP system has expanded and over time, actually enabled informal activity to grow, often in plain sight.

“Ukraine’s narrow VAT base not only reduces VAT collection but also undermines growth and the formalization of shadow activity: the size-based simplified tax eligibility thresholds encourage firms to stay small, which leads to additional distortions”, the report reiterates.

A serving Ukrainian Armed Forces official Serhii Marchenko – who while touting the VAT system has stated: this (VAT) was the largest economic reform in Ukraine since Independence and, perhaps, the largest economic reform in Ukraine in modern history.

The reformer Kuchma (and Kuchma, despite the controversial Gongadze case, is the greatest reformer of all Ukrainian presidents) was solving the problem of where to put the children of unemployed workers of huge Soviet factories that produced useless anthems and went bankrupt en masse. And Kuchma came up with the idea of ​​turning the army of the unemployed into an army of the SELF-EMPLOYED.

Red Director Kuchma was a pragmatist and understood the economics of the process perfectly. Instead of paying unemployment benefits, the law on the simplified taxation system allowed small businesses to pay the state a small penny and forget about bandits and scum.

The key principle of this, the MOST SUCCESSFUL reform in the history of independent Ukraine, was the RADICAL SIMPLIFICATION of accounting reporting. No tax invoices, no accounting, no auditors – you pay 200 hryvnias a month and you don’t owe anyone anything anymore!

Kuchma understood that he simply CANNOT control his security forces so that they do not make business a nightmare. Therefore, he simply REMOVED the very POSSIBILITY of making business a nightmare by passing a law that removed any possibility of giving shit to individual entrepreneurs. It was wise.

You should have seen the faces of the scumbags who instantly lost their earnings. And you should have seen how, within a few years, the bandits disappeared from the streets, because small businesses no longer needed a “roof” and without money, the gangs simply ceased to exist naturally.

And now the Verkhovna Rada of petty scoundrels who used to sit on Mindich’s payroll and are now rebelling because the envelopes with money have run out has decided to cancel the most successful reform in Ukraine and return individual entrepreneurs to VAT taxation.

And VAT, let me remind you, is the ultimate tax, because it immediately attracts scumbags. And no matter how correctly you pay VAT, they will still open a criminal case against you. Because if there is some schemer or cashier in the entire supply chain and VAT payment, the scumbags will fuck everyone up and they will be punished regardless of whether you are doing business honestly or not. Kuchma understood this. That’s why he signed a law that did not include VAT or any other nonsense, but rather a simple and clear system of minimal reporting and minimal hassle in relations with the state.

Now Zelensky is getting back to the 90s. Just yesterday I had dinner with a friend and we agreed that the president is very Soviet in his way of thinking and wants the economy to have as many state-owned enterprises as possible and as few private businesses as possible that he cannot control. And this desire to control the economy through state banks, state-owned Energoatom, state-owned railways, state-owned regional energy companies – it simply kills the economy and democracy.

VAT for sole proprietors is the worst thing you could think of to destroy the economy. This is a systemic violation of economic freedom and the destruction of the business environment. It seems that we are now somewhere in 150th place in the world in terms of economic freedom. Now we will be in 200th.

And such ratings of economic freedom have nothing to do with war and wartime restrictions. It’s just that the mafia doesn’t want a free economy, because you can’t steal billions from a private company, like Mindich, Galushchenko, and some others stole from the “state” Energoatom.

Absolutely disgraceful law. Anyone who votes for it will be disgraceful scoundrels until their death. Some few hours later, Entrepreneur and activist, Valery Pekar, while responding to Marchenko in his own post on Facebook, has exhibited a mixed reaction. In his post Pekar reiterated:

• A simplified taxation system is not about lower taxes. It is about simplified reporting, that is, a guarantee of independence from illegal actions of state representatives. People are willing to pay even more for this.

• Ukrainian VAT is not a European-style value-added tax. It is an incredibly criminalized set of tools for influencing business, which often turns into a turnover tax.

• VAT can only function in a relatively honest state. Therefore, the first step should be internal changes in the tax system, and only then tightening the screws.

• The tax office sees all the abuses perfectly well. It doesn’t fight them because it feeds on them. It would be desirable.

• It is possible to restore order, one of the previous governments did it. The next government rolled back.

• The economic impact will be dire. Key centers of economic thought have written many times.

• None of the advocates of the innovation has ever paid VAT themselves.

With Ukrainian officials heading to D.C. next week for the IMF Spring meetings, this debate will be central to their discussions. The question now is whether the government can convince the IMF to let go of this demand and avoid imposing VAT on millions of small businesses.

Suvro Sanyal – Team Maverick.