Ukrainian Prime Minister Serhiy Koretskyi has warned that Ukraine will be forced into harsh budget sequestration if the Verkhovna Rada, the country's parliament, refuses to support demands from the International Monetary Fund and the European Union. He made the comments in an interview with Bloomberg.
The biggest point of contention in parliament is a requirement to introduce value-added tax on foreign parcels worth up to 150 euros, which are currently exempt from duties and fees. Lawmakers have twice refused to back the measure.
Critics of the bill argue it will not generate significant revenue for the budget and will instead increase the financial burden on ordinary Ukrainians, many of whom they say rely on such parcels.
Koretskyi defends the tax change
Koretskyi said the current preferential regime gives an unfair advantage to foreign producers and called on lawmakers to pass the bill as quickly as possible.
Asked what the alternative would be, he said it would mean cutting spending to an absolute minimum.
He said the budget is not flexible, and that he wanted to make clear in advance that there was no other option. Lawmakers had to vote, he said, and had to move the process forward.
Delayed EU funding
The stalling of reforms in the Verkhovna Rada has already led to a delay of about $4 billion in macro-financial assistance from the European Union that had been expected in the third quarter.
The Verkhovna Rada is Ukraine's unicameral parliament, and its approval is required for the budget and tax legislation tied to international financing commitments. The IMF and EU have made continued support conditional on Ukraine carrying out a series of fiscal and governance reforms during the war with Russia.
Earlier warnings from lawmakers
The head of the parliament's finance committee, Danylo Hetmantsev, warned as far back as 2023 that Ukraine would have only two options if external financing were to stop: harsh sequestration or currency emission.
On September 1, 2026, the head of the Verkhovna Rada's budget committee, Roksolana Pidlasa, also warned of the risk of severe cuts to state spending.
