Rada adopts bill on higher social standards from Dec

Friday, May 20, 2016 - 17:40 (EEST) Section: Latest news

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.