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Ukraine's state budget 2017: the key figures

Author : 112.ua

18:38, 21 December 2016
Ukraine's state budget 2017: the key figures

Author : 112.ua

Ukraine increases expenditures on national security and defense to 5% of GDP

18:38, 21 December 2016

Read the original text at 112.ua.

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Following the old tradition, at night Ukrainian Parliament has passed the state budget for next year. The “votes” for the budget appeared after a long bidding. Financial "cakes" were distributed among various lobbies, parliamentary groups, and even some factions. That is why the final figures of the budget has not yet been published.

Related: The seven "pillars" of Ukraine's budget for 2017

For instance, Ukraine’s Cabinet has reduced the rent for oil and the use of radio frequency resources for more than 2 billion UAH. It has also abolished pension fee for purchasing foreign currency; it would cost about 260 million UAH. At the same time, financial support of farmers increased (+ 2 billion UAH), system of financing scholarships was also revised. The budget proscribes 35 million for resettlement of the Crimean Tatars, spending on the Armed Forces and National Guard became bigger (370 and 90 million UAH respectively). And these are only the most obvious numbers.

Related: Ukrainian Parliament adopts Budget 2017 at 5 a.m.

The text of the amendments is still not published. But the Cabinet assures that macroeconomic figures remain the same, as well as the income and expenditure side. 112.ua introduces the most important indicators of the state budget-2017.

Salary and social benefits increase

The Government has applied in the budget growth rate of 3%. This figure for the last year was 2%, but in early March, the Ministry of Finance forecast has worsened to 1%. The Cabinet of Ministers expects to increase budget revenues by about 20%, to a level of 721.4 billion UAH. Of this amount, 17.1 billion UAH should come from the privatization of state enterprises. 190.8 billion UAH should be borrowed.

The costs would increase by about 16.5% to 790.4 billion UAH. The maximum amount of the budget deficit might amount to 77.5 billion UAH.

Related: Ukraine may receive IMF tranche in 2017 after budget adoption

The new budget provides an increase in the size of the public debt limit of 14% (up to 1.7 trillion UAH). Ukraine plans to receive 86 billion UAH of external loans. In particular, the loan of 4.7 billion will be provided by the International Bank for Reconstruction and Development, 2 billion - by the European Bank for Reconstruction and Development, 7.5 billion - by the European Investment Bank, 1.5 billion - by the Credit Institution for Reconstruction, 68 million – by the government of Poland, and 55 million UAH would come from the Japan international cooperation agency.

The budget proscribes hryvnia exchange rate at annual average 27.2 per dollar.

Related: Reconfiguring Ukrainian budget: salaries of the MPs increased

Ukraine plans raise the minimum wage to 3200 UAH (in hourly amount it means about 20 UAH / hour). In addition, the subsistence minimum could change three times in the next year. The Government proposes to set a monthly subsistence minimum at 1544 hryvnia from 1 January 2017, to increase it to 1624 UAH from May 1, and from December 1 - up to 1700 UAH.

The Cabinet plans to increase for 170 UAH benefits and maternity leave. The social benefits for poor families might increase for 250 UAH for each child aged 0 to 13 years, and for 500 UAH for each child aged 13 to 18 years.

Related: Samopomich party leader on Privatbank: the biggest budget robbery in millennium

4 billion UAH were applied in the budget in order to pay the students scholarships. In addition, the cost of the Pension Fund might increase by 7.3% - to 156.2 billion UAH.

Related: Girl from Ukraine receives scholarship for startup

The emphasis on defense

The state budget provides 130 billion hryvnia, or 5% of GDP on the national security and defense. This is 13.8% more than in the current year.

MIA would get 46.2 billion UAH, i.e. 12% more than in the current year. The National Police will get 15.5 billion UAH, while Interior Minister Arsen Avakov named 23 billion the ideal figure.

Defense budget in 2017 could grow by 15% - up to 64.4 billion. Of these, approximately 6.5 billion should go for weapons and equipment, 52 billion to support the Armed Forces and military training, 1.92 billion for treatment and rehabilitation of the military. Intelligence can expect for 1.403 billion UAH (what is 300 million more than in 2016).

Financing the security service would not increase significantly: 6.2 billion UAH, of which 11.460 million are for the Antiterrorist Center. Financing of the Foreign Intelligence barely increased - 950.040 million against 952.587 million UAH in the 2016 budget.

Related: US Congress approved defense budget involving $ 350 million military assistance to Ukraine

The costs of the Prosecutor General in 2017 would also become higher: from 3.31 billion to 5 billion.

Ukrainian Government does not spare money for the anti-corruption agencies: NABU funding would increase by 58% (773.5 million UAH). Agency for Prevention of Corruption will receive 605 million UAH, and anti-corruption prosecutors - 105 million UAH.

More than a billion hryvnia are allocated for the Verkhovna Rada, including 48 million for media covering of the parliamentary work. 100 million UAH would go for the restoration of the Mariinsky Palace.

Ministry of Energy and Coal Mining might get 2.6 billion UAH, in 2016 it has received some 2.009 billion.

State Agency of Automobile Roads of Ukraine will receive almost 30 billion UAH. Ukraine sets customs experiment which proscribes sending 50% of the excess revenues from customs on. $ 1 billion might come from international financial organizations.

State Committee for Television and Radio Broadcasting will receive 1.38 billion, of which 455.7 million would be spent on organizing "Eurovision" Song Contest.

Related: Poroshenko signs law on budget financing of Crimean TV channel

Ministry of Youth and Sport might receive 1.9 billion UAH, which is about 20% more than this year. 330 million UAH would be allocated for training the Paralympic Games participants, while the 2016 budget had only 183.91 million for this purpose. But the Olympians would receive less than this year (144 million versus 257 million).

Spending on the Ministry of Culture would increase by 25.5% (3.35 billion UAH). Half a billion will be spent on the development of national cinema, 647,3 million – to support the national theatres, 12.3 million – for Heavenly Hundreds museum and Ukrainian Institute of National Memory.

Ministry of Informational policy might receive 252 million UAH, the bulk of which is provided on the production and broadcasting of radio programs and dissemination of national information.

The Agriculture Ministry would get 7.55 billion UAH. For comparison, in 2016 this figure was 1.489 billion. State fisheries agency prescribes 308 million UAH, which is almost 2 times more than in 2016.

Taxes

Excise taxes on alcohol and cigarettes would grow, while rent for oil would be reduced, as well as volumes and the number of port tariffs and fees.

 

Related: Ukraine may receive IMF tranche if 2017 budget is passed in the near future, Deputy Governor of NBU

Amendments to the Tax code increases the excise tax on alcohol and alcoholic beverages by 20%, on wines and sparkling wines – by 12%. Also, according to the bill will increase the rate of excise duty on tobacco products - by 40%.

Rent for the oil deposits of up to 5000 meters is reduced from 45% to 29% of the commercial products, for deposits of more than 5000 meters - from 21 to 14%.

Transactions importation of aircraft goods are exempt from VAT by January 1, 2025. In the same period, the subjects of aircraft are exempted from corporate income tax.

Local budgets

The financial resources of local budgets in 2017 will amount to 424 billion UAH, 86 billion UAH, which is 28% more than in 2016. Local budget revenues will increase by 25% - to 185 billion UAH.

The Council also changed the principles of the preparation and execution of local budgets. Now the state budget would be responsible for the expenditures for vocational training (professions of national importance).

Related: Budget-2017: Ukrainian Government to raise minimum wages

By the way, in 2018, 5% of the gas rent would go to the local budgets.

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