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Ukraine Adopts Tax Reforms Sought By IMF - Temporarily

Ukraine's parliament has approved a budget for 2016, fulfilling a key demand of the International Monetary Fund (IMF) that enables it to keep providing Kyiv with loans.

Lawmakers approved a series of tax reforms and tax increases, reducing the tax on employers, unifying the tax rate on personal income, and increasing excise taxes on tobacco, fuel, and alcohol, with the goal of balancing the budget.

The reforms were contentious. Many deputies argued that they unfairly increased prices for Ukrainians who are already struggling to make ends meet during a deep economic recession.

The IMF had warned it was critical to approve a budget that complied with the Fund's $17.5 billion bailout program before it would provide Kyiv with a third, $1.7 billion loan installment.

It was not immediately clear whether the budget met all the IMF's requirements.

Parliament approved a budget with a deficit at 3.7 percent of economic output, the figure agreed with the IMF and one of its key demands.

But Ukraine had promised to adopt permanent tax reforms, and the tax changes adopted December 24 were only temporary, with more action promised later.

Based on reporting by Reuters and TASS

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