The Verkhovna Rada of Ukraine has adopted a draft law on amendments to
the state budget, envisaging an increase in social standards starting from
December 1, 2016, by 10% instead of 6% as originally planned.
The bill on amendments to the Law of Ukraine "On the State Budget of
Ukraine for 2016" (in the part related to social standards and government
subsidies) was supported in the first reading by 248 MPs with the required
minimum of 226 votes.
First Deputy Finance Minister Oksana Markarova said during presentation of
bill No. 4543 that the increase in social standards above the previously
planned level would be financed by means of increased targets of value added
tax receipts, as well as oil and gas royalties.
Thus, the minimum wages from
December 1, 2016, will increase to UAH 1,600 ($63) as compared to a previously
planned level of UAH 1,550 ($61). The minimum income level for employable
population will increase to UAH 1,600 ($63) from the current level of UAH 1,450
($57). The minimum income level for people who have lost their ability to work
is set at UAH 1,247 ($49) as compared to the current level of UAH 1,130 ($44).
It is noted that due to the increase in the minimum wages from December 1,
2016, by UAH 50 ($1.9), as well as the abolition of pensions taxation, personal
income tax revenue to the budget will decrease by UAH 0.4 billion.
It is planned that the share of the state budget funds earmarked for the
Pension Fund of Ukraine will be increased by UAH 576.9 million to UAH 145.5
billion in order to ensure payments of pensions and allowances.
It is also planned that the amount of subsidies
channeled to the local budgets for provision of allowances and housing
subsidies to the population will be increased by UAH 5.3 billion to UAH 40.3
billion. Budget subsidies are aimed at supporting the most vulnerable groups of
the population to pay for housing and utilities against the background of a
recent hike in prices of natural gas for households.
At the same time, the revenues of the budget's general fund are expected to
grow by UAH 6.7 billion to cover expenses in connection with higher gas prices
in the country, as well as the increase in social standards and the abolition
of pensions taxation.
Due to higher prices of natural gas for households and
heat suppliers, corporate income tax receipts are projected to grow by UAH 1.2
billion, value-added tax receipts are forecast to grow by UAH 2.1 billion. Gas
royalties are projected to contribute to the revenue growth by UAH 3.8 billion.
As UNIAN reported earlier, the Cabinet on April 27 decided to table to the
Verkhovna Rada a bill on amendments to the state budget for 2016, which provide
for an increase in social standards from December 1, 2016, by 10% instead of 6%
as planned by the previous government.
At the same time, Prime Minister Volodymyr Groysman said that social
standards might be reviewed again in the current year.
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