Verkhovna Rada cuts state budget for 2020

Source : 112 Ukraine

Budget revenues of Ukraine cut from $40.5 bln to $36 bln, while expenses increase from $43.7 bln to $46.7
20:00, 13 April 2020

The Verkhovna Rada has cut the state budget of Ukraine for 2020. 249 parliamentarians voted for the bill. The session was broadcasted by 112 Ukraine TV channel.

According to the changes, the state budget’ revenues were reduced from 40.5 bln to 36 bln dollars and the expenses increased from $43.7 bln to $46.7 bln dollars.

The state budget deficit has been increased from 3.5 bln dollars to 11 bln dollars.

It is planned to cover the increased deficit through borrowing. The permitted limit of state debt as of December 31 will increase from 75.5 bln dollars to 88 bln dollars.

Compared with the bill introduced by the Cabinet, the fund for combating COVID-19 has been reduced by 73,8 million dollars, and now it is in the amount of 2,4 billion dollars. At the same time, the Ministry of Health was allocated 583.7 million dollars for the state guarantee program for medical services, and 369.4 million dollars was allocated to the Ministry of Social Policy for the payment of pensions and pension allowances and 22 million dollars for benefits.

Related: Rada to vote for draft laws without discussions, except for laws on budget changes, land market

Funding for local budgets was reduced by 369 million dollars (total minus). The Regional Development Fund lost funds from 277 million to 181 million dollars, the Social and Economic Development Fund lost from 73.8 million to 62 million dollars, the Support Fund for United territorial community of 77.5 million dollars was reduced to zero.

Financing of subsidies was reduced by more than 295.5 million dollars.

The bill also provides for funds to help family members of doctors who died from coronavirus. At the same time, payments to members of executive bodies and supervisory councils, parliamentarians, judges, prosecutors and other persons were limited.

A subsidy to agrarians in the amount of 147.7 million dollars was also restored (the Cabinet proposed less).

3.7 million dollars were allocated construction of the Dnipropetrovsk International Airport (the Cabinet proposed none) and 775,000 dollars for Ukrainian Institute under the Ministry of Foreign Affairs of Ukraine.

Funding for the ‘New Ukrainian School’ was cut by 13 million dollars. As a result, after all adjustments, the ‘New Ukrainian School’ will receive about  44 million dollars. At the same time, a subvention for the support of teachers in the amount of 55.4 million dollars was taken from local authorities.

The revenues of the general fund of the state budget (funds transferred by the National Bank) increased by 73.8 million dollars (and is now 1.6 billion dollars).

The expenditures for the Regional Development Fund were partially restored. 4.9 billion dollars will go for education, science, culture, sports and healthcare.

The expenses of the general fund of the State Judicial Administration budget were increased by 39.8 million dollars.

The new state budget left the norm for limiting the salaries of officials, employees of state enterprises and members of their supervisory councils to 10 minimum wages (1,700 dollars) but only for the period of quarantine.

Tax and customs revenues have not changed. This year they will decrease by 5.3 billion dollars.

Related: Ukrainian MPs offer reducing state budget revenues by 3 billion USD

Income from income tax will decrease by 764.7 million dollars, and from personal income tax - by 683.4 million.

Rent for gas production will decrease by 753.6 million dollars.

Also, decrease by 2.4 billion dollars is expected in VAT (a decrease in revenues from 16.4 to 14 billion dollars).

In privatization sphere, expected revenues reduced from 443.3 million to 18.4 million UAH.

Out of 1.7 million for the export promotion only 554,000 dollars were left.

Funding was completely suspended for:

Debt management agencies in the amount of 2.1 million dollars (previously, the Ministry of Finance claimed the indispensability of this structure);

Youth mobility project in the amount of 18.5 million dollars;

Partial loan guarantee fund in the amount of 8.8 million dollars;

Energy Efficiency Fund in the amount of 59.1 million dollars;

Fund of the President of Ukraine in the amount of 18.5 million dollars;

financing of the work of trade missions abroad (it is 923,577 dollars per year).

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