By KYIV. Sept 14 (Interfax-Ukraine) – The government draft of the state budget of Ukraine for 2024 will not be accompanied by a bill of tax changes to increase revenues, Finance Minister Serhiy Marchenko said.
“We are not going to make separate changes to the Tax Code. We believe that the tax system should be stable during war,” the minister said on the national telethon.
At the same time, he confirmed that in terms of personal income tax, the Ministry of Finance is going to redistribute the so-called “military” personal income tax (from payments in the defense sector), which is currently sent to local budgets, and direct it to the security sector and defense.
“That is, those surplus funds that are now being generated as part of the military personal income tax, which are deposited in the accounts of local budgets, they should work for the security and defense sector,” Marchenko explained.
According to him, there is a fairly long discussion on this issue. “I hope that we will come to a constructive solution,” the minister said.
He also said that negotiations are currently ongoing with Ukraine’s partners regarding the fulfillment of the obligations that they assumed as part of the implementation of the program with the IMF to finance Ukraine’s budget for 2024.
“This is not an easy process, it takes a lot of time, effort and requires decisions on the implementation of the program with the IMF. I hope we will achieve progress,” Marchenko commented.
He again recalled that while the security and defense sector’s expenditures this year exceed UAH 1.6 trillion, taxes and other internal budget revenues cover only UAH 1.3 trillion, and next year this situation will continue.
“We finance all other expenditures at the expense of our partners,” the Minister of Finance emphasized, pointing out that if the pace of external financing is disrupted, domestic borrowing will have to be increased, which could jeopardize the achieved macroeconomic stability.
Commenting on other details of the draft state budget for 2024, the minister said that no significant reductions in any expenses were envisaged. However, it is possible that some of the external assistance will be directed to reconstruction and development sectors, rather than domestic resources.
