Editor’s Note: This is the 76th issue of Ukrainian legislator Yaroslav Zelezniak’s weekly “Ukrainian Economy in Brief”, covering events from September 30-October 6, 2024. The digest highlights the steps taken by the Ukrainian parliament in relation to business, economy, and international financial programmes.
The Kyiv Independent republishes with permission.
The memorandum of understanding with the IMF includes benchmarks and soft commitments
The CMU created a commission for the selection of the Bureau of Economic Security Director.
On October 4, the Cabinet of Ministers established a competition committee to select a director for the Bureau of Economic Security.
Three members of the Commission selected by the Cabinet of Ministers are representatives of academic institutions
* Tetiana Mathselyk is a professor of public law and taxation at the State Tax University.
* Yuriy Ponomarenko is dead, the head of the criminal law department at the Yaroslav Mudryi National Law University
* Oleh Hilyaka is an associate professor at the Yaroslav Mudryi National Law University, teaching human rights and legal methods.
The members of the commission appointed by the international partners include:
* James I. Wasserstrom, anti-corruption specialist (USA), particularly at the UN
* Laura O. Stefan, (Romania), expert in anti-corruption, former director of an office at the Romanian Justice Ministry and international expert on rule of law with the European Commission and Council of Europe
* Donatas Maaskevicius, (Lithuania), Former head of the Lithuanian Railways Procurement Agency as well as former deputy head of Lithuanian Police. Former special attache for the Lithuanian Police at Europol.
The Tax Committee has approved the draft law regarding tax increases. The final reading is scheduled to take place this week.
On October 4, the Committee on Finance, Tax and Customs Policy voted in second reading to approve the draft law #11416 d on the record-high increase in taxes.
The main provisions remain the same, including: an increase in the military levy to 5% from 1.5%; a military tax for individuals; a 50% tax on bank profit; an increase in minimal land tax; a 25% tax on financial companies’ profits; monetary rebate tax exemptions; and converting to monthly reporting of income tax for conscripts with economic reservations. In total, 1,388 amendments were made to the draft law in the second reading.
The Cabinet of Ministers has so far rejected a suggestion that the value-added tax be increased to replace (at the very least) the increase in the military levy.
All provisions will also be retroactively effective from October 1.
The draft law will be on the agenda for the Verkhovna Rada plenary session week, scheduled from Oct. 8-11.
The CMU has achieved another benchmark in the Memorandum of Understanding with the IMF.
The Finance Ministry adopted the methodology for evaluating tax incentives and their impact on the state’s budget on Sept. 30, which was the deadline. It’s the structural benchmark #24 in the Memorandum between the International Monetary Fund. According to the document the Finance Ministry adopted a resolution relevant on September 27.
Obligations of the EU
This week, the parliament will be considering several draft laws under the Ukraine Plan.
During the Verkhovna Rada (Ukraine’s Parliament) meetings scheduled for Oct. 8-11, two draft laws will be considered to fulfill Ukraine’s obligations under Ukraine Facility’s financial mechanism.
The parliament will first vote on the final read of the draft law #11310, which outlines the fundamental principles of the state climate policy.
In the second reading, the Verkhovna Rada is expected to consider the revised draft law #12039 regarding plea agreements. The new draft was created to take into consideration all the warnings from the anticorruption experts about the previous draft on this issue.
Ukraine has taken several steps to meet the requirements of the Ukraine Plan.
Last week, the Cabinet of Ministers of Ukraine approved the Strategy of Demographic Development to 2040 and signed a technical task for the creation of an IT system that will ensure the National Commission for State Regulation of Energy and Public Utilities fulfills its duties.
The Cabinet met the deadlines for two indicators of Ukraine Plan, which were part of the Ukraine Facility Mechanism, scheduled for the third quarter. The Cabinet met these obligations on the last scheduled day.
Other key economic issues
The Tax Committee recommended draft laws on the establishment of a bank for development for 2nd reading.
On Oct. 4, the Committee on Finance, Tax and Customs Policy adopted for first reading the draft laws #11238 and # 11239 on the establishment of a National Development Agency, (submitted by Danylo Hentmantsev and others lawmakers).
As we reported in Issue No. 58, according the draft laws, the National Development Agency will be a state-specialized institution with a mandate for recovery and structural change of the economy. It will implement lending programmes for the recovery of a country.
Yaroslav Zelezniak, the first deputy chairman of Ukraine’s Parliamentary Committee on Finance, Tax, and Customs Policy, is a member of the Ukrainian Parliamentary Committee on Finance, Tax, and Customs Policy. He is also co-chairman of the Ukrainian Chapter for the Parliamentary Networks of the World Bank, International Monetary Fund and World Bank.
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