Draft budget 2019: "Golden" cigarettes and billions of hryvnias for law enforcers

Author : Yaroslav Konoshchuk

Source : 112 Ukraine

Ukraine's government traditionally plans to fill the budget holes at the expense of smokers, drinkers, mobile operators, imports, and privatization
11:04, 20 September 2018

Open source

The budget bargaining has started in Ukraine. The draft budget-2019 has been published on the website of the Verkhovna Rada. Now the ball is in the court of the deputies, who together with all interested parties will distribute a budget pie of 36 billion USD.

"Golden" cigarettes, imported billions, and devaluation

In 2019, the government expects to collect 35,7 billion USD in treasury and spend 39 billion USD. Revenues of the consolidated budget will amount to almost 46,2 billion USD, which is 11.2% higher than the same figure this year. Hryvnia to dollar rate, according to the calculations of the government, at the end of the year will be 29.4 UAH / USD.

In order to earn these funds, the government traditionally plans to do it at the expense of smokers, drinkers, mobile operators, imports, and privatization.

So, in accordance with the amendments to the Tax Code, the excise rates for beer, fortified wines, ethyl alcohol, and products containing alcohol will grow by 9%. The excise on cigarettes will also raise by 9%. In this case, in accordance with the transitional provisions, the rate of excise duties on cigarettes will increase by about 50% by 2021.

As for mobile operators, it is proposed to increase the rates of rent for use of the radio frequency resource of Ukraine by 9%. Probably, such additional expenses will be taken into account in tariffs for mobile communication.

Imports, according to the calculations of the government, will replenish the treasury by 12,1 billion USD at the expense of VAT from imported goods.

Related: 2019 draft budget provides $460 million for road development and maintenance

The government traditionally expects to raise 0,6 billion USD from privatization. However, the experience of the past few years shows that this line fits into the budget solely for balance. The National Bank will supplement the treasury almost by 1,6 billion USD.

Lend the government in the coming year intends to 345 billion hryvnia. At the same time, Ukraine expects to receive from the external creditors 5,1 billion USD. It is worth noting that the Cabinet expects growth rates for external loans. In accordance with the draft budget, the average placement rate in foreign markets will be 9% per annum, whereas earlier this figure was 2-3 + percent lower. In the domestic market rates are even higher - 15.7%. 10 billion  USD are planned to repay the previous debts.

Billions of hryvnias for law enforcers and budget-friendly MPs

Expenditures on the Verkhovna Rada, in comparison with 2018, remained practically unchanged and will amount to 60 million USD in accordance with the government's plans. The same situation is with the State Administration of Affairs, which according to the plans of the government should be satisfied with 93 million USD.

Related: Ukraine's draft budget 2019: Beautiful figures and despressive reality

But the expenses for the maintenance of the Cabinet decreased, in comparison with 2018, by 0,53 million USD. Now it is proposed to spend 27,2 million USD on the government logistics. At the same time, financing of the "Uriadovyi Kur'er" (the national daily newspaper published by the executive branch of Ukraine – Ed.) has disappeared from the budget. In general, the economic department of the government plans to spend about 57 million USD. To control the use of budgetary funds, the government proposes to spend less than half of this amount - more than 21,4 million USD. It is rumored that not this entire amount goes to its destination.

Financing of the law enforcers will grow again. At the same time, the budget completely destroys the myth of the growth of defense spending. So, in accordance with the draft budget, the expenses for the Prosecutor General's Office will grow by 17,85 million USD. A special anti-corruption prosecutor's office will receive an increase of 0,32 million USD. But the Ministry of Internal Affairs, in comparison with September 2018, can receive an additional slightly more than 18 billion hryvnia. In general, the budget of the department is proposed to increase from 2,3 to 3 billion USD. At the same time, the State Border Service, subordinated to the Ministry of Internal Affairs, received an additional 0,046 billion USD from these funds. Of these, in particular, the construction of the scandalous project "Wall" might get additional 7,14 million USD. National Guard also received an increase of 0,046 billion USD.


Related: 2019 state budget provides $589 thousand financial assistance for families of died on Maidan

Next year, 21,4 million USD are proposed for purchase of the fire engines. Tenders for the purchase of machines are regularly won by the firm, which is associated with one of the sponsors of Lyashko’s Radical Party.

The budget of the Ministry of Defense for the first time in the history of Ukraine exceeded 3,57 billion USD, having increased by 0,64 billion as compared to 2018. The government promises to raise the salaries of the military. For the purchase and repair of weapons and military equipment, the army received additional 21,4 million USD.

The Security Service of Ukraine can expect to get 335 million USD, which is 43 million USD more than in 2018.

The government plans to allocate 10,25 million USD for the Supreme Anti-Corruption Court, which has not been formed yet. At the same time, it is proposed to send about 3,6 million USD for the salary.

Decimating the mines

23,5 million USD are planned for the restructuring of the mines. They are going to prepare five mines for closure and close 3 mines. At the same time, it is proposed to spend 0,8 million USD on the support of the Novovolynska mine, which has been under construction for a few years. It is not clear how this is combined with the government's statements about the need to increase coal production.

Land reform: the nth attempt

The draft budget provides for the implementation of land reform. For these purposes, it is proposed to allocate 8,7 million USD. However, the fate of the moratorium has not yet been fully determined. The Constitutional Court is re-introduced to the recognition of an unconstitutional moratorium on the sale of agricultural land.

Related: Draft state budget provides around $19 million for ammunition disposal

By tradition, the Cabinet proposes to save on payments under decisions of the European Court of Human Rights. The government intends to allow the payment of these debts by promissory notes with a maturity of 7 years and a rate of 9.3% per annum. Also, they will save on the maintenance of vocational schools and part of universities. It is proposed to transfer all vocational schools and universities that do not have the status of national, to the local budgets maintenance.

In addition, lifting the salary of judges of local, appellate and specialized courts, as well as social guarantees for policemen and environmentalists, is frozen for a year.

Related: MPs budget $7.5 billion for defense in 2019

The subsistence minimum in the next year will exceed 71,4 USD and at the end of the year will amount to 72,4 USD. The minimum wage will increase to 149 USD, the average salary, according to the calculations of the government, will be 362 USD. Excluding official inflation, it will grow by 6.9%.

The government expects to spend 2 billion USD on subsidies. In the light of a possible increase in tariffs for gas and, accordingly, heating fees would not break the pocketbook.

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