Press conference of the Minister of Finance of Ukraine

On June 15, Minister of Finance of Ukraine Oleksandr Danyliuk held a press conference dedicated to the Budget Resolution for 2018-2020 approved by the Cabinet of Ministers, the new transparent procedure for automated VAT refund and the launch of a pilot project at the National Academy of Medical Sciences.

Budget Resolution“This is for the first time that we are implementing mid-term budget planning, its core element is a mid-term budget resolution. This is absolutely different from the ones which would be adopted in previous years. The budget resolution is now a strategic document directing the use of budget funds for priority reforms. Thus, we lay ground for the future development of Ukraine’s economy keeping not the past, but the future in mind”, the Minister of Finance said.

The new three-year format of the Budget Resolution offers a strategic vision for the development of the budgetary policy and lays ground for systemic comprehensive reforms. The key figures of the key areas of the budget policy are based on the macroeconomic forecast data approved by the Government in the end of May.

One of the above figures is the GDP growth which shall total more than 11% in the next three years. The inflation is expected to slow down from 9.1% to 5%, the public debt shall go down from 66.8% to 55% in 2020, the state budget deficit shall decrease from 3% of the GDP in 2017 to 2% of the GDP in 2020.

Tax policy

Plans of the Ministry of Finance regarding the tax policy include the following:
- set-up of the operation of the Financial Investigation Service;
- implementation of the mandatory minimum BEPS standard action plan in the national legislation;
- launch of the single account for tax payments;
- consolidation of the payroll and income tax reporting;
- incremental adjustment of the excise tax rate for tobacco products to the rate set in the respective EU directive;
- implementation of the overall income and expense reporting as well as indirect tax control for citizens aimed to check the correspondence between incomes and spending etc.

Register for automated VAT refund

On April 1, 2017, a single register for automated VAT refund was launched enabling everyone to trace the transparent VAT refund procedure for companies.

“The electronic register for automated VAT refund is a silent revolution in tax administration. Since the launch of the register, more than 21.3 billion hryvnas have been refunded. In total, approx. 7,000 applications for VAT refund amounting more than 24.5 billion hryvnas have been submitted since April 1, 2017. The launch of the register for VAT refund is only the first step. To improve the business climate in Ukraine, we will carry on our efforts to simplify the tax administration system”, Oleksandr Danyliuk said.

The pace of the VAT refund has been significantly increased as well compared to 2016. In April 2016, refund applications amounted 13.2 billion hryvnas with only 4 billion hryvnas of them refunded. In the beginning of June 2016, 39% of the submitted amount were the refund applications which were still pending. In April 2017, refund applications amounted 9.9 billion hryvnas, 9 billion hryvnas of this amount were duly refunded. Thus, the pending refund amount in the beginning of June 2017 was only 6% of the total amount compared to 39% in the same period of last year.

Reform in the healthcare sector

“We have shifted the focus of the budget planning from directly funding hospitals and paying for empty rooms to funding delivered services. Public services must become the key benchmark in the efficiency assessment of budget programs.
We plan to increase our spending for the healthcare reform every year starting from 56 billion hryvnas in 2017 to 81 billion hryvnas in 2020. I want to reassure everyone that the healthcare reform is completely covered by our funding”, the Minister commented.

On June 14, the Government approved a decision to implement a pilot project aimed to change the funding mechanism for healthcare services provided by some of the research institutions of the National Academy of Medical Sciences of Ukraine. The pilot project is due to start on July 1, 2017.

It is proposed to develop a mechanism for the transition to the funding of healthcare service actually delivered at 4 clinics belonging to the research institutions of the National Academy of Medical Sciences: M.M. Amosov National Institute for Cardiovascular Surgery, M.D. Strazheska Institute for Cardiology, A.P. Romodanov Institute for Neurosurgery, O.O. Shalimov National Institute for Surgery and Transplantology.
The Minister also answered questions regarding the key work areas of the Ministry of Finance. The Ministry of Finance continues to implement reforms and regularly informs the public on their progress.