Kyiv warns state budget nearing 'critical point,' urges lawmakers to pass key finance bills

President Volodymyr Zelensky and Prime Minister Serhii Koretskyi on Sept. 14 called on lawmakers to advance legislation tied to Ukraine's international support, warning that the state budget is approaching a crisis.

Koretskyi also announced the dismissal of acting State Tax Service Head Lesia Karnaukh amid the budget shortfall.

The government's warning follows parliament's previous failure to advance certain bills required under Ukraine's commitments to the International Monetary Fund (IMF), including a bill imposing a controversial parcel tax.

"The situation with state finances is approaching a critical point," Koretskyi said on Sept. 14. "I urge all members of parliament to pass the necessary bills as soon as possible, as they are crucial for receiving international financial assistance."

Failure to back the bills by the required deadlines could cost the country billions, Koretskyi said. In particular, Ukraine could lose out on "a significant portion" of $29.5 billion in planned funds.

Members of parliament would receive a detailed schedule outlining deadlines for each required vote, the prime minister said.

For its part, the government will accelerate its planned implementation of over 40 decisions Ukraine must adopt to secure the planned funds. Previously, Koretskyi said the government would complete this process by Nov. 1.

The government has not committed to implementing all 42 required decisions by Oct. 15, the prime minister said.

Koretskyi said the government was working closely with lawmakers to ensure Ukraine secures the necessary votes to receive the funding, which he said is necessary for social programs and the military.

"Government officials are ready to work with the deputies on each bill, each wording, and each provision to ensure the necessary support and the prompt adoption of decisions," he said.

Zelensky reiterated the importance of the bills in his evening address.

"To close this budget deficit and continue the necessary payments, parliamentarians and the government must work together as seamlessly as possible," he said.

"The list of laws and government decisions that need to be adopted is quite specific. ... The list includes both popular and unpopular decisions, but each one represents specific funds to ensure that Ukraine survives and can defend itself."

While neither Zelensky nor Koretskyi provided a specific date for the next vote, the president said he hoped MPs would deliver the desired result "as early as this week."

Zelensky also commented on the State Tax Service, shedding light on Koretskyi's announcement earlier in the day of Karnaukh's dismissal as acting head of the department.

Koretskyi did not provide a reason for the decision, saying only that nominations for a replacement would be submitted by the Finance Minister at the next government meeting. The president, however, hinted at possible distrust with the tax service.

"We must verify what is happening at the tax service and other agencies, and whether they are truly working 100 percent for the state budget," Zelensky said.

"There must be honest work. I have asked the Prime Minister and the Minister of Finance to verify this."

Parliament previously failed to advance the draft laws on Sept. 1, even as an IMF mission was visiting Kyiv. Koretskyi told lawmakers that in order for Ukraine to receive nearly $30 billion in financial support, the legislature must pass 43 bills linked to Kyiv's obligations to international lenders.