Ukraine's government has reduced value-added tax (VAT) refund arrears to Hr 4 billion, Ukrainian Prime Minister Mykola Azarov said at a press conference entitled "Ukraine: Reforms, Competitiveness, Investments," organized by the Ukrainian Foundation for Effective Governance and The Financial Times.
"As of today, this [the debt] is about Hr 4 billion, and it will go down to about Hr 3 billion as of October 1," he said.
The premier said that the cabinet plans to fully repay delayed VAT refunds by the end of the year and switch to the automatic reimbursement of VAT.
According to Prime Minister Mykola Azarov, the government’s VAT refund arrears in March 2010 amounted to Hr 35 billion, by mid September they dropped to Hr 11 billion, and the government plans to reduce it to Hr 3 billion by early October.
According to agreements with the International Monetary Fund reached in July 2010, the state’s debt for the reimbursement of VAT should be cut to Hr 3 billion by October 1, 2010 and to zero by the end of the year. To achieve this, the Ukrainian government in August 2010 issued VAT bonds worth Hr 16.4 billion to securitize delayed VAT refunds accumulated as of May 1, 2010.
