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Public Finance Management Support Programme for Ukraine (EU4PFM)

On 18 of June 2019 The Central Project Management Agency (CPMA, Lithuania), together with the Delegation of the European Union to Ukraine and in co-operation with the Ministry of Finance of Ukraine, the State Fiscal Service and the State Tax Service, are launching the EUFPM.

Effective reform of the public finance management system is the basis for implementing state policy and achieving strategic development goals by supporting overall fiscal discipline, strategic allocation of budget funds, and effective delivery of services.

The Ministry of Finance, together with the relevant government agencies, prepared a well-grounded and well-grounded four-year Public Finance Management Strategy, which was adopted in February 2017.

The Ministry of Finance jointly with the Cabinet of Ministers, the Parliament and the State Fiscal Service recently achived the following:

  • it was decided to divide the DFS into two separate State Customs and State Tax Service; Approved Conceptual Directions of Reforming the System of Bodies implementing the State Tax and Customs Policy, which, among other things, take into account EU Customs blueprints; at the final stage of the development of an action plan for Conceptual Directions
  • developed and agreed with the European Commission and approved the Road Map of Ukraine's accession to the EU / EFTA Joint Transit Procedure
  • Draft law has BEPS introduced
  • MLI agreement has been ratified
  • developed and agreed with the European Commission, and adopted in the first reading and is already recommended for the second reading a bill implementing the provisions of the Convention on the procedure for joint transit
  • a draft law on AE was adopted and agreed with the European Commission in the first reading
  • a draft law on the protection of intellectual property rights has been developed and agreed with the European Commission

EU4PFM components the implementation of which is starting now are aimed at supporting tax and customs reforms, as well as building capacity for public finance management, in particular in IT and HR. For their embodiment, the European Union allocates 29.5 million euros. The total budget of the program is 55 million euros, and the completion of its activities is expected in 2022.

The EU4PFM Customs Component will assist in introducing legal and procedural changes in the customs and trade facilitation areas, in particular by providing support for integration into the EU Common Transit System and Ukraine's accession to the Convention on Joint Transit Procedure. In addition, the establishment of the institution of an authorized economic operator and improving the reliability of the customs clearance process will be supported. The next objectives of the Program are to improve control after completion of customs clearance and improvement of the institutional capacity of customs audit units.

The Program will also develop IT strategies and HR strategies that are important to increase the capacity and effectiveness of institutions involved in managing public finances.

Within a few months, the Ministry of Finance will also receive support under the other part of the EU4PFM project, which is being implemented by SIDA: in reforming the approaches to budgeting, in particular the implementation of further steps to implement the medium-term budget planning system, which is important for sustainability, liquidity management, building an efficient system of accounting in the public SECTOR, increasing the accuracy of the macro forecast.

For reference

EU4PFM program will support tax and fee administration reforms that will enhance the institutional and institutional capacity of Ukrainian institutions to implement and implement a modern tax compliance strategy aimed at promoting the concept of voluntary tax payments; analysis and improvement of business processes in the tax and customs services; Enhancing Ukraine's ability to levy taxes from the tax base, in particular by improving the exchange of tax information with other countries and by avoiding tax evasion; Continue harmonization of tax and customs legislation with EU legislation and best international practices, as well as improve the institutional and organizational capacities of tax and customs services.

The program will also provide support to public finance institutions in Ukraine in the development and implementation of modern methods of human resources management, including the implementation of anti-corruption measures, adaptation and automation of business processes, improvement of organizational structures and practices, and strengthening of the capacity of institutions to manage public finances in Ukraine in the field of planning, implementation and monitoring of reforms.

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