The Ministry of Finance estimated the probability of default in 2019

Минфин оценил вероятность дефолта в 2019 году

Ukraine threatens to default in the case of a tax on the capital, according to the Ministry of Finance

To default may result in the termination of cooperation with the IMF due to the introduction of the tax on the capital.

The Ministry of Finance warns that a tax on the capital instead of income tax will leave Ukraine without an International monetary Fund programme and will lead to a default in 2019. This is stated in the message on the Agency’s website.

It is noted that the IMF agreed with the introduction of NVC in Ukraine, but only for companies with an annual turnover of 200 million hryvnia, and provided that they should be upfront to pay 50% of the amount of tax liabilities on tax for profit for the year 2018. In this case, NVC will be entered for 98% of legal entities, but the remaining two percent, generating up to 85% of the total amount of income tax to continue to pay it. We are talking about 4500 of the largest companies.

“This model of taxation was discussed with the IMF and after arduous negotiations, were agreed as possible,” the Ministry said.

According to the Finance Ministry, if you enter Nnvc for all companies, direct budget losses will amount to 46.7 billion hryvnias to compensate for that would be impossible.

“The IMF at the operational level has approved a new stand-by program for Ukraine. A prerequisite for the approval of the program Council of the Foundation is the implementation of Ukraine’s commitments in the areas of fiscal stability and responsibility and a balanced budget and reduce the budget deficit. Only if the condition for continued cooperation with the IMF Ukraine can avoid default on debt obligations”, – noted in the Department.

There are reminded that next year Ukraine must send to the debt service more than 400 billion. “

If Ukraine will come out of the IMF program, the country will lose access to the financial resources of international organizations and institutional investors, and the default of the phantom threat will turn into a real prospect in the next year”, – stated in the message.

Noteworthy, the draft law on the tax on the capital submitted to the Parliament by President Petro Poroshenko. The administration previously said that the tax on the capital “positively perceived the business environment as a whole.”

Recall, the IMF and Ukraine reached agreement on a new 14-month program of support to the economic policy stand-by 3.9 billion dollars, which will replace the programme of the eff, which expires in March 2019.

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