Ukraine’s urgent fight on the financial frontline. 7 hours ago. Jonathan JosephsBusiness Reporter, BBC News. EPA. For Ukraine the financial frontline is perhaps the unseen battlefield in the war with Russia.. Keeping the economy on a level footing isn’t just about today, but central to the future that they’ve spent four years fighting for.. “We don’t want to be just a poor neighbour [to the EU],” says Ukraine’s Finance Minister Sergii Marchenko.. “We want to provide for Europe, something which they lack,” he explains, in reference to the military expertise that the country has reluctantly gained since February 2022.. Marchenko adds that the “very painful” experience his country has gained could help the rest of the continent defend itself.. Membership of the EU is a top priority for Kyiv, so there is a lot of gratitude for the bloc’s financial support, which is bringing the two closer together, and aiming to give Ukraine the advantage over Russia.. A new €90bn ($105bn; £79bn) loan from the EU will help cover the shortfall in Ukraine’s budget over the next two years. It’s been approved by the European Parliament, and the first payment could be made in April.. Why did Putin’s Russia invade Ukraine?. Ukraine remembers its dead as war enters a fifth year. That loan is the biggest share of a $136.5bn (£101bn) international support package, without which Marchenko says his country cannot survive after everything it’s been through.. “Our strong army depends on our strong economy, because all of our resources, which we mobilize internally, we channel… to defend our nation,” he says.. “We are grateful for the support of other nations to help us, but definitely Ukraine’s taxpayers are doing the best help for our army.”. In December 2024, taxes in Ukraine were increased for the first time since the war began, including on personal incomes, small businesses and financial institutions.. That’s part of the reason why domestic sources are expected to bring $67.5bn into government coffers this year, a 15% increase from a year earlier.. However, the government’s budget for 2026 includes spending plans worth about $112bn, with about 60% of that going towards the army. That leaves a shortfall of around $45bn.. To bridge the gap the government is trying to get contentious new tax increases through parliament before the end of this month.. As part of the terms of a new $8.1bn loan that the International Monetary Fund (IMF) recently approved, digital platforms in Ukraine will have to pay more tax, and exemptions to value added tax will be reduced.. Kyiv received the first $1.5bn from the IMF at the start of this month. Ahead of that the IMF’s mission chief for Ukraine, Gavin Grey, said that with its spending needs “expected to remain very high” the country needed to live within its means.. In addition to outside help, “Ukraine will also need to do more to tackle tax evasion and avoidance, and mobilizing domestic revenue in the near-term”, he said.. The IMF suppo
