Page 44 - UKRRptDec18

Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital wrote in a note on November 2. "The 2018 state budget assumes these transfers amount to UAH50.5bn."
Meanwhile, the National Bank of Ukraine (NBU), as an independent institution, decided that its transfers will total UAH44.6bn for 2018. At the moment, the NBU’s transfers are paid to the budget in the full amount as provisioned by the NBU, and no more are expected. To close the gap, the government is likely to make more efforts to collect tax and customs revenue.
6.1.1 Budget dynamics - specific issues...
Ukraine has secured an agreement with the International Monetary Fund (IMF) on the introduction of an exit capital tax in the country , according to the nation's President Petro Poroshenko. Earlier this year, Poroshenko was about to submit a bill to the nation's parliament, the Verkhovna Rada, that replaces the corporate profit tax with a new exit capital tax , which taxes distributed profits. At the same time, Ukraine's main donor, the IMF, advised against the idea of introducing the exit capital tax. Poroshenko urged lawmakers to implement an acceptable model of this reform as soon as possible. "For my part, I am not going to abandon the idea of an exit capital tax and I hope it will be realised at the first opportunity," he added. Recently, the World Bank pointed out that the new scheme is unacceptable due to the risk of tax revenue loss . Most countries rely on taxing corporate profits for revenue and only a few have switched to taxation of distributed profit, the bank said. Most of these countries have lost a large share of their revenue from taxing profit during this switch and this loss is inadmissible for Ukraine now, according to the multinational lender.The exit capital tax says businesses do not need to pay a 20% profit tax if they invest this money in the development of their domestic businesses. For foreign investors, the innovation suggests that the tax rate will be fixed at 15%, whereas now companies pay up to 25% on profits.
Local budgets will increase 21% next year to $10bn , from $8.25bn this year, predicts Gennady Zubko, minister of regional development. This would match a similar increase this year. This unprecedented budget money comes from the government’s decentralization program and revenue sharing between the capital and the 24 regions. Little appreciated inside Kyiv’s Ring Road, this surge of money across the country is expected to help President Poroshenko in his March 31 re-election bid.
The number of taxpayers who declared about the refunding of value added tax (VAT) in 2018 grew by 1,000, to 5,000 applications , acting Head of the State Fiscal Service of Ukraine Oleksandr Vlasov said on November 6. The average monthly claim for VAT refunds in 2018 increased by 20%, to UAH11.5bn. At the same time, more than 85% of the amounts claimed for refunding are returned during the month, the authority said. At the same time, the average monthly VAT refund increased in the current year by UAH1.1bn, to UAH10.8bn, according to the authority. According to the State Treasury Service, in January-October 2018, VAT was refunded to the amount of UAH107.9bn, which is 11% higher than the year-over-year figure. The October compensation amounted to UAH10.3bn compared to UAH12.46bn in September 2018 and UAH9.7bn in October 2017.
44 UKRAINE Country Report December 2018 www.intellinews.com