12/24/2015 Ukraine: Daily Highlights - The Verkhovna Rada adopted budget for 2016

The Verkhovna Rada adopted budget for 2016

12.24.2015 Daily Highlights by the Digests & Analytics Ukraine Agency

Topics from Media and Social Networks

• The Verkhovna Rada adopted budget for 2016.
• Catholics celebrate Christmas.
• Leader of the “Ukrop” party Corban detained again.

Key Events in Ukraine

• Deputies of the Verkhovna Rada around 4 am voted for adoption of the budget for the next year, as amended by the Cabinet of Ministers, with reduced revenues and expenditures. Before that, the deputies adopted all the laws of the "budget package", which they failed to adopt on Wednesday, according to which the excise tax on alcohol and tobacco was increased , and rent for natural gas production was reduced . In the Tax Code the terms of the VAT refund for businesses were changed . The tax on personal income for all categories of taxpayers is set at 18% (instead of two operating rates of 15% and 20%) for the dividends the rate is 5%. The maximum limits for revenues of the third group of payers on simplified tax system are reduced from UAH  20 mln to 5 million of yearly turnover. The benefits for farmers were cancelled. A single social contribution was reduced to 22%. The minimum wage and living wage are set at about 1,400 UAH, the exchange rate should not exceed 24.1 UAH/$.
  Starting from the next year, an additional import duty was cancelled. The contributions to the budget of the enterprises with the state capital were increased. In 2016 the payment of lifetime allowances except for invalids and participants of war activities to be suspended . The maximum amount of pension will not exceed UAH 10,700 (about $450).
  Amendments to the Budget Code were adopted, according to which the size of the single tax distribution between the state and local budgets changes . Rental fee for the transit of natural gas and revenues from premiums to the tariff for natural gas for all categories of consumers were excluded from the state budget revenues .
  The deputies gave the Government powers to impose the retaliatory sanctions against Russia if it imposes  restrictions on trade with Ukraine from January 1, 2016.
  The President was granted the right of appointment and dismissal of the Chief of the National Guard, instead of just making a submission of such designation. The Presidential amendments to previously vetoed law on the privatization of printed communal and state media were adopted.
  A law on public procurements was adopted, from now on they must be carried out at public compulsory auctions. If the customer is unable to determine the parameters and characteristics of the goods or services, a procedure of a competitive dialogue is foreseen.
  The following year, up to 15 thousand of the foreign military are allowed to participate in the exercise on the territory of Ukraine.
  To cover the deficit of the Pension Fund in December,  UAH 14 billion were allocated for the payment of pensions after the New Year.
  The Verkhovna Rada allowed not to transfer the cases already under investigation to the National Anti-Corruption Bureau.
  The powers of deputy Filatov, who became mayor of Dnepropetrovsk, as well as powers of singer Ognevich and Mayor of Chernigov Atroschenko were terminated.
  The third session of the Parliament will last until 2 February - until the beginning of the next session. Head of the Verkhovna Rada Groisman was instructed to convene the extraordinary meetings when the necessity arises.
• Five generals, including the Head of the land forces, resigned in connection with the explosion of a munitions depot in Svatovo.
• In Dnipropetrovsk the SBU detained the leader of the “Ukrop” Korban again, his apartment was searched.
• Changes to the hryvnia official rate were insignificant: 22.96 ₴/$ (-0.04 UAH), 25.14 ₴/€ (+0.04 UAH), 3.30 ₴/10 ₽ (+0.06 UAH).

Ukraine at War

• During the day, the clashes in the area of Donetsk and Gorlovka did not stop. Popasna was shelled by the militants from the "Grad-P" units, some of the missiles hit the residential sector. According to official reports, there were no losses among the soldiers. Observers in Kominternove reported that after the appearance of the OSCE mission militants left the town they captured on Wednesday, and then returned there with the haavy weapons and tanks.
• Representative of Ukraine in the contact group at the talks in Minsk, former President Kuchma said that one of the main issues on which the parties can not reach agreement, is holding of elections in the Donbass. Ukraine insists on their holding according to the Ukrainian legislation, under the supervision and in accordance with the OSCE standards, following the withdrawal of illegal armed groups and obtaining by Ukraine of the full control over the border. Former President does not understand why the Ukrainian authorities did not respond to violation of the ceasefire by the militants .

Ukraine and the World

• Russian banks, against which the US imposed sanctions, were cut off from VISA and MasterCard services.
• Russian President Putin acknowledged that in Russia began a protracted crisis caused by low prices for the raw materials and Russian imports, and advised the government to prepare for a long-term sanctions imposed by the West.
• Russia banned imports of Ukrainian pork "in connection with the deteriorating epizootic situation with swine plague".

Trends

• Ukrainian business more and more often moves its information infrastructure to Europe in connection with the attempts of the authorities to put pressure with the use of power structures. According to the statements of some German web hosting companies, the number of clients from Ukraine this year has significantly increased.
• According to some experts, the adopted amendments to the Tax Code and budget conserve the existing oligarchic conspiracy in the distribution of national wealth and suggest no reforms that could give a push to the economy. Adoption of the budget at  night without a thorough study and analysis with changes made by "a voice" contradicts the regulations of the Verkhovna Rada. The Government put the deputies into a dilemma: either the budget is adopted in the form it was submitted by the Cabinet of Ministers, or the financial assistance of the international organizations is terminated.