The Government’s draft 2016 state budget
envisages an increase in social standards by 12% and a rise in expenses on
national security and defense up to UAH100 billion. Prime Minister of Ukraine Arseniy Yatsenyuk said this at a
government meeting on Wednesday, December 2.
He recalled that
one of the main criteria of obtaining by Ukraine of the IMF third tranche as
well as general support from foreign creditors in the amount of $ 4 billion
"hinges on equilibrium and economic efficiency of tax reform and the law
on the state budget."
One of the basic
criteria of the draft budget, which is under consideration by the Government,
is a budget deficit at 3.7% of GDP.
to carry out a drastic tax reform that will help small and medium businesses to
develop, create jobs, boost its economic activity, and consequently - increase
revenues both in their business and the state budget," underlined the
He stressed that
this required a significant reduction in expenditures of the state budget:
"The Government has embarked on a very adequate reduction of state budget
Arseniy Yatsenyuk also emphasised
that by deciding to reduce government expenses the Government would not cut
social expenses and "social standards would be increased by 12% in 2016, according
to the government’s draft."
The main item of
expenses, Arseniy Yatsenyuk
recalled, lies in the national security and defense area: "The Russian
aggression against Ukraine and Russian war against Ukraine is not completed.
That is why the Government proposes to increase funding of national security
and defense by 10 billion."
Thus, the total
amount of funding for national security and defense from the general and
special fund will make up UAH100 billion.
also plans to significantly increase funding for capital expenditures and
regional development, including united communities: "Total funding from
the regional development fund will amount UAH 5.7 billion. This money will go
to the local needs: hospitals, schools, infrastructure, roads.
This is what communities need today."
Arseniy Yatsenyuk also underlined that the Ministry of Finance of
Ukraine together with Western experts worked out "a fundamental and
effective tax reform": "We are ready for a full dialogue with our
coalition partners. As to the best initiatives from MPs of Ukraine, which lie
in the sphere of tax administration, transparent and effective system of
reimbursement of VAT in order to avoid any manual control of the VAT refund -
we support all these initiatives and they will be included in a draft Tax Code,
which must be supported by Ukrainian MPs."
the desire of coalition partners to make their own suggestions. I hope that
during this week we will complete all technical consultations with MPs of
Ukraine, it will be much greater interest in real cooperation with the
Government, no one will be politically interested in objecting to the tax
reform offered by the Government and required by the country as well as the
budget that meets both the basics of financial stability and social criteria
that have to be provided by the Government. And we will vote the relevant bills
in the walls of Ukrainian Parliament in coordination, actively and for the
benefit of the Ukrainian people," he pointed out.