Reforms, Resilience, Results: How EU4PFM Brought Ukraine Closer to EU

Article by Jurgita Domeikiene, Team Leader of Components 1, 3, and 4

As we close 2025, along with the current phases of the EU Public Finance Management Support Programme for Ukraine (EU4PFM), it’s time to look back and reflect on the progress achieved together with our partners. 2025 was another challenging year in Ukraine’s modern history, defined by ongoing russian full-scale aggression, continuous disruptions caused by missile and drone attacks, energy instability, and, as a result, constant tests of institutional strength. Yet it was also a year of transformation. Against all odds, Ukraine took some of its strongest steps ever toward the European Union and demonstrated resilience and commitment to reform.

Throughout the whole EU4PFM journey, which began in 2019, the Project has stood as one of the key drivers of Ukraine’s public finance management (PFM) transformation and supported national partner institutions as they navigated both wartime realities and EU accession requirements.

Since 2019, EU4PFM has been reshaping Ukraine’s PFM landscape. But after Ukraine received EU candidate status in 2022, the Programme shifted into an even higher gear, supporting its partner institutions for EU accession across:

• budget planning and financial control,
• tax and customs,
• digital transformation,
• human resources management and anti-corruption practices.

Despite the war, the reforms in those areas did not stall – they accelerated.

Breakthrough for EU Single Market and Ukraine’s Customs

Given that the EU is primarily a customs union, one of the Programme’s most symbolic and practical achievements was Ukraine’s historic accession to the Convention on a Common Transit Procedure on 1 October 2022. Thanks to the Programme’s support:

• key legal acts were prepared,
• Ukraine deployed the New Computerised Transit System (NCTS) – its first ever EU customs IT system,
• trade with the EU and other Common Transit Convention members simplified.

This single achievement moved Ukraine closer to the EU Single Market than ever before. Parallel to this, EU4PFM supported the drafting of the new EU-compliant Customs Code, which is undergoing final EU assessment now and, hope, will be adopted in the beginning of 2026.

One of the most important current and future priorities is the preparation of all IT systems necessary for Ukraine to operate in the EU Single Market. Among other things, these measures are essential in the fight against corruption in the customs sector, as digitalisation and streamlined processes strengthen anti-corruption control.

EU4PFM also invests in public administration reforms – an area where transparency is crucial for Ukraine’s future EU integration. In this context, the Programme supports the transparent and internationally supervised selection of the new Head of the Customs Service, which is currently underway.

These reforms go well beyond compliance, they reshape how Ukrainian state institutions interact with business and citizens.

A Smarter, More Transparent Tax System

In the taxation stream, EU4PFM helped Ukraine take a bold step toward OECD and EU standards. Ukraine has become a reliable partner in the global network for the automatic exchange of tax information, strengthening cooperation within the international compliance community.

The Programme promotes voluntary compliance, digitalisation, and trust between citizens and the state. EU4PFM provided Ukrainian partner institutions with the opportunity to introduce modern tax administration models aligned with leading global and EU practices. The following incentives for voluntary compliance by businesses and taxpayers are worth mentioning:

• fully modernised State Tax Service Contact Centre, which improved service culture and operational efficiency,
• development of free e-cash register applications for small businesses,
• introduction of a risk-based approach that does not disrupt compliant business.

Effective tax collection and increased transparency of institutional activities were further strengthened by the Programme’s support for implementing advanced IT solutions, including an IT system for tax dispute management.

With the support of EU4PFM, Ukraine was also able to introduce solutions that many developed countries are still moving towards. These include the Big Data Transfer Pricing Analytical System, the Standardised Audit File (SAF-T), and the automated E-audit system, all implemented in line with OECD standards.

However, the Programme’s primary strategic focus remains Ukraine’s integration into the European Union. EU4PFM provides comprehensive assistance in the area of tax policy harmonisation, including a detailed assessment of the compliance of Ukrainian tax legislation with EU norms. In cooperation with the Ministry of Finance, the Programme contributed to drafting amendments to the Tax Code and to developing detailed plans for transposing EU tax directives that have not yet been implemented.

Looking ahead, the coming years set ambitious goals for the Programme: full harmonisation of Ukrainian legislation with EU directives and the continued strengthening of administrative capacity to meet EU requirements.

Strategic Decisions That Shape the Future

Beyond operational reforms, EU4PFM helped build the strategic foundation for long-term changes. With the Programme’s support, strategic documents in the field of public finances were prepared and adopted – the Public Finance Management Strategy, the Strategy for Digital development of the PFM system as well as Digitalisation Plans for Customs and Tax authorities, the Human Resources Management Strategies of the Ministry of Finance, the State Tax and State Customs Services.

Another major accomplishment – development and rollout of a new IT system for budget planning and monitoring. A fully digitalised, paperless and effective process was already experienced in the development of the Budget Declaration and the State Budget for 2026 and will continue to be used in the years ahead.

The Programme played a central role in strengthening administrative capacities of responsible Ukrainian PFM institutions in preparing for the EU acquis screening process in four negotiation chapters: Taxation, Customs, Financial Control, and Own Resources. Competencies and skills gained during the screening will help Ukrainian authorities better prepare for negotiation process with EU services as well as to plan activities needed for the future membership in the EU.

The Programme’s impact is consistently reflected in the European Commission’s annual Enlargement Reports, where Ukraine’s progress in PFM reforms is repeatedly highlighted.

Supporting Ukraine at Its Darkest Hour

After russia launched its full-scale invasion, EU4PFM quickly reallocated EU funds to secure institutional resilience. The emergency support to PFM institutions covered the purchase of:

• essential user IT equipment for secure remote work,
• key data centres and backup storage systems,
• diesel generators and other IT-support systems.

This immediate response helped public finance institutions remain functional during airstrikes, blackouts, and mass displacement of their staff.

The Programme has grown into one of the EU’s most impactful reform initiatives in Ukraine. Two phases are already being implemented, and preparations are underway for a new phase lasting until 2028. Today, over 140 international and national experts are working within EU4PFM, bringing best international experience, modern solutions, and unwavering commitment to Ukraine’s European future.

This year proved once again that even in the most difficult conditions, meaningful reforms are not only possible, they can be accelerated. The progress achieved is a testament to Ukraine’s determination, the EU’s unwavering support, and the power of partnership.