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the established average annual exchange rate of ₴40.7 per $1. According to the EFF’s expanded financing program with the IMF, in 2023, external financing amounted to $42.5B, and this year it is forecast at the level of $38.1B, but it is expected to decrease to $22.9B next year.
How business tax increases and economic reservations from mobilization will affect Ukraine’s budget. Ukraine needs to find new sources of income for the state budget because raising taxes for businesses will lead to a decline in the country's defense capabilities, according to Deputy Chairman of the Parliamentary Committee on Finance Yaroslav Zheleznyak. "We finance our military through taxes and customs duties. If we have fewer taxes and duties, it means less money for the army. That is why it is important to support business. After all, if the situation in the business environment worsens, it will mean not only economic deterioration but also in safety," Zheleznyak emphasized. Therefore, it is necessary to find new revenue streams, particularly by improving the administration and collection of existing taxes. Meanwhile, the head of the Committee for Economic Development, Dmytro Natalukha, said that companies paying for economic reservation of their employees from mobilization will bring ₴200B ($5.1B) in revenue. It is noteworthy that the business community supports the policy of providing economic reservation for workers with salaries of ₴30,000 or more because it will allow salaries to be brought out of the shadows and increase tax revenue.
Ukraine’s budget revenue increased by 65% in February, and the gambling industry increased its tax payments by 370%. The receipt of taxes, fees, and mandatory payments to the general fund of the state budget of Ukraine in February amounted to ₴184.8B, 65.4% more than in January, the Ministry of Finance reported. Revenues from the tax service increased by 78.4% to ₴107.4B, while income from customs decreased by 15.9% to ₴39.8B. Corporate income tax increased in February to ₴61B, and rent income from various assets increased to ₴3.5B. At the same time, ₴31B came in the form of grants from Japan and Norway. Overall, in February, ₴229B (against ₴147B in January) in taxes, fees, and other payments came to the general and special funds of the state budget. Notably, in two months of 2024, gambling enterprises paid ₴2.2B in taxes, which is 370% more than in the same period last year. In January, the gambling business paid ₴400M in taxes, and in February ₴1.8B.
6.1.2 Budget dynamics - specific issues...
Ukraine spent ₴235B ($6B) on its defense in two months. The general fund of the state budget's expenditures on the security and defense sector amounted to ₴$235B or 55.4% of the total state budget expenditures in January-February 2024. For the entire past year, ₴1.84T, or 60.8% of all expenditures, was allocated from the budget for security and defense.
Liberalizing the land market will move Ukraine $20B toward restoring its agricultural sector. Liberalization of the agricultural land market and increased transparency can bring $35B to Ukraine's budget. This could close the current deficit of more than $20B in agricultural recovery financing and help to provide the $500B that is necessary for Ukraine’s overall reconstruction. The expected economic benefits from the liberalization of the agricultural land market for legal entities are estimated at 1-2.7% of GDP annually over the next three years. Such liberalization and the step towards EU membership will allow
49 UKRAINE Country Report April 2024 www.intellinews.com