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Finance does not plan to discuss the specific rates in the new simplified taxation system. Vorobei noted, "We have an approximate list of rates, but it will not be introduced all at once, it will be widely discussed with business. It will be a public process." A change in the tax model is not in the near future. The Ministry of Finance warned that the reform of the State Tax Service must first take place, and only then it will be possible to talk about changing taxes.
6.1.3 Budget dynamics - funding
Ukraine got the EU’s €50bn package on February 1 and expects the first €4.5B from the new EU package in March; here is what the program provides. The European Parliament must approve the €50B Ukraine Facility program, previously approved by the European Council, during the plenary session scheduled for February 26-29, 2024. The first payment of €4.5B is expected in March, the Ministry of Economy noted. The plan for the Ukraine Facility envisages the implementation of structural reforms in Ukraine. Tranches will be provided quarterly to fulfill the criteria defined in the Plan for carrying out the planned reforms. During 2024-2027, Ukraine will receive €33B in the form of loans and €17B in the form of non-refundable support within the framework of the new instrument, the Ukrainian Reserve. According to the summit’s results, based on the European Commission's annual report on the program's implementation, the European Council will debate possible revisions to the program’s financial framework annually. This was a compromise to Hungarian Prime Minister Viktor Orbán in exchange for him not exercising his veto.
This year, Ukraine should receive $37B in international financial aid, but in the following years, this amount will decrease, said Vasyl Furman, a member of the NBU Council. He noted that in 2023, Ukraine received $43B in international financial aid. And in 2025, the amount will decrease to $25B.
In two years, more than 41 countries, including Poland, have committed a total of €92.5bn ($100 billion) in military aid to Ukraine, according to the Ukraine Support Tracker of the Kiel Institute for the World Economy.
Europe cannot support Ukraine alone without the US. President Volodymyr Zelensky's fears have been echoed by other Ukrainian leaders, such as Foreign Minister Dmytro Kuleba, who said earlier in January that there is no "plan B" if U.S. aid ends.
Belgium, which presides over the EU Council, insists on a clear mechanism for confiscating Russian assets. Belgium is not against the confiscation of the €280B in frozen assets belonging to the Russian Central Bank, but there must be a clear mechanism for this. For example, they can be used as collateral to attract funds for Ukraine," Belgian Prime Minister Alexander De Croo said in Davos. He explained that the risk is that financial stability could be undermined because central banks often place assets in each other. The lion's share of assets - securities invested by the Russian central bank - are frozen in the Euroclear depository located in Brussels. According to De Croo, some securities have a maturity date and are convertible to cash. This transaction is taxed at a rate of 25%. "If there is any taxable income, we isolate it so that it can go to Ukraine," he said. As the official clarified, the tax on frozen assets in 2023 amounted to about €1.3B, and in 2024, this figure will amount to about €1.7B.
Ukraine's state budget deficit after 2024 can be covered by profits from the investments of the frozen Russian assets according to the President's Office.
56 UKRAINE Country Report February 2024 www.intellinews.com