“This is a huge deception”: Novak debunked the myth about the IMF’s demands to raise taxes
14 April 14:13
Tax increases in Ukraine, particularly for sole proprietors, are not a direct requirement of the International Monetary Fund. Such decisions are made by the state itself, but individual lawmakers and government officials often present them as if they were recommendations from international partners. Economist Andriy Novak made this statement in an interview with the YouTube channel "Komersant Ukrainian".
“Never—I emphasize, I stress once again, I repeat once again—the International Monetary Fund never instructs any country with which it cooperates on specific measures the country should take regarding the introduction or abolition of any taxes, new fees, or excise taxes. The IMF never dictates such things to any country,” he emphasized.
According to the economist, the IMF assesses not the level of specific taxes, but the overall state of public finances, and above all—the level of the budget deficit.
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“The IMF looks at a single indicator—the budget deficit of the country with which it cooperates. There is a so-called safe level of budget deficit, which is no more than 3.5% of the country’s GDP. If the budget deficit is within these limits, then the public finances of that country are considered safe.
How a country adheres to this deficit is an internal matter for the country itself. In turn, there are two ways to reduce the budget deficit: either increase budget revenues or reduce expenditures. Or do both at the same time,” he added.
At the same time, the economist emphasizes that the widespread claim that the IMF demands tax hikes is not true.
“This is a massive deception that, unfortunately, is repeated in our country under practically every government. In other words, they use the IMF as a smokescreen when they want to do something unpopular,” he notes.
The expert concludes: the issue of taxes is the responsibility of the Ukrainian government, and it is the government that determines how to fill the budget and support the economy, especially in wartime.
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