IMF says it is ready to help Ukraine with covering war and mobilisation costs

Alfred Kemmer, Director of the International Monetary Fund's European Department, expects Ukraine to generate domestic revenues if budget expenditures increase due to the war.

Source: Voice of America

Details: This is how Kemmer answered the question of whether international donors are ready to increase their assistance to Ukraine if budget expenditures increase due to the war and mobilisation.

The IMF representative emphasised that the fund's support is focused on supporting the work of the state and its social obligations, not on the military.

Quote from Kemmer: "I always make it very clear that we expect domestic revenues to be generated. A stronger economy, structural reforms that support economic activity, and better governance will generate additional tax revenues.

We support and monitor the budget as a whole, not individual expenditures; we and donors are helping the government of Ukraine to carry out basic functions during the war, such as protecting vulnerable people, paying salaries, pensions, education, etc. This is what the [EUR] 122 billion funding programme is aimed at."

More details: If additional budget expenditures arise due to the war, Kemmer says that better governance and, in particular, the National Revenue Strategy, which the government approved on 28 December to meet the conditions of the IMF programme, should help generate additional expenditures.

The strategy will allow Ukraine "to receive more budget revenue, to support the needs for spending during this time," the Fund’s official said.

He added that the National Revenue Strategy is also important to build a modern state, and a modern state needs investment.

Kemmer said Ukraine needs to create an environment for the private sector that will allow it to receive tax revenue and finance expenditures.

Background:

• Speaking to the press this month, Zelenskyy said that an additional mobilisation of 450,000 to 500,000 people would cost Ukraine another 500 billion hryvnias (US$13.1 million).
• He added that six taxpayers are needed to finance one soldier, meaning that three million more people would need to work to pay for the increase in troops.

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