EU Links Part of €90 Billion Aid Package to Ukraine with Abolition of Parcel Tax Exemption
The EU will link part of its €90 billion aid package to Ukraine with changes in parcel taxation, a requirement from the IMF. Kyiv must abolish the tax exemption for parcels up to €150. This is a condition for receiving €8.4 billion in tranches, with the first expected in June.
The European Union will link part of its €90 billion aid package for Ukraine to changes in parcel taxation, a requirement already made by the International Monetary Fund. These tax demands will apply to the macro-financial portion of the loan, totaling €8.4 billion.
To receive these funds, Kyiv must adopt legislation that expands the share of foreign parcels subject to a 20% value-added tax. This involves abolishing the tax exemption for international parcels valued up to €150. Ukraine is expected to receive the first tranche in June, the second in September, and the third by the end of the year, following the completion of reforms.
This requirement aligns with a condition set by the IMF for the disbursement of its next $700 million aid tranche. The proposed parcel taxation model is unpopular among Ukrainians. MP Yaroslav Zhelezniak stated that he does not see sufficient support for the measure's adoption, which requires at least 226 out of 392 possible votes. Dmytro Herasymenia, spokesperson for Ukraine's Ministry of Finance, reported that the government is working on finalizing the EU loan agreement and its terms before parliamentary ratification.