Editor’s note: This is issue 66 of Ukrainian lawmaker Yaroslav Zhelezniak’s weekly “Ukrainian Economy in Brief” newsletter, covering events from July 22-28, 2024. The digest highlights steps taken in the Ukrainian parliament related to business, economics, and international financial programs.
The Kyiv Independent is republishing with permission.
Benchmarks and soft commitments in the memorandum with the IMF
The Cabinet of Minister's draft law on increasing military levy receives huge criticism from business and experts, there are not enough votes for it to pass the Parliament.
A number of key Ukrainian business associations and analytical centers opposed the government's approach to raising taxes which the Cabinet of Ministers submitted in draft laws #11417 and #11416.
The American Chamber of Commerce in Ukraine expects the government's draft law to lead to further discrimination against transparent businesses, increase distortion in competition between taxpayers and tax evaders, undermine trust, and promote the expansion of the shadow economy.
At the same time, 13 analytical NGOs (in particular, Center for Economic Strategy, Institute of Economic Research, CASE Ukraine, Economic Experts Platform) made a statement that the draft law contains a number of extremely negative norms that will cause significant damage to the economy. Experts emphasized that increasing the value-added-tax rate by 4-5 percentage points could be a better solution to ensure additional revenues.
Martin Fornusek
Business and experts also call for implementing systematic changes to increase budget revenues, such as the reform of the State Customs Service (the draft law #6490-d), ensure the effective work of law enforcement state bodies, the State Tax Service and the Economic Security Bureau, improve the tax administration, in particular for real estate tax.
According to our information and public statements of the Chair of Budget Committee Roksolana Pidlasa, the Committee is going to significantly change the Cabinet's draft law. There are not enough votes among lawmakers for the government's draft law in the current version.
According to Parliament’s schedule, lawmakers may submit alternative draft laws by Aug. 2 and the Verkhovna Rada may consider the draft law in the first reading no earlier than Aug. 20.
Ukrainian business supports the customs reform.
Ukrainian business associations, members of the Ukrainian Business Council, call on the Parliament to finalize draft law #6490-d for the second reading and to restart the State Customs Service with competition and attestation commissions with a decisive vote of international representatives.
As we reported in Issue 65, a working group of the Tax Committee finalized for the second reading draft law #6490-d on the restart of the State Customs Service. The Committee on Finance, Tax and Customs Policy will likely consider the draft law at the end of August.
Other key economic issues
The Parliament adopted the draft laws to extend the martial law and general mobilization in Ukraine.
The Verkhovna Rada adopted draft laws #11433 and #11434 submitted by the president to extend martial law and mobilization from Aug. 12 for another 90 days until Nov. 9. The parliament has voted to prolong martial law twelve times.
The Parliament won’t meet for voting until mid-August.
After the voting for draft laws #11433 and #11434 on extending martial law and mobilization, the Parliament was blocked by lawmakers who demanded to adopt a draft law to ban the Moscow church in Ukraine. All other plenary days were canceled, and the next ones are scheduled from Aug. 19.
Elsa Court
