Looks like Ukraine will immediately turn into a Greek disaster

Shock and payment
The Government has prepared an action plan quick fix budget problems

Finance Minister Oleksandr Shlapak announced unpopular but necessary in the current situation the government's decision
Photo: Kirill Chubotin / Kommersant

The Ministry of Finance has prepared a plan to optimize budget expenditures on the basis of which the end of March to be held sequestration budget. For this purpose, inter alia, to reduce capital costs, eliminate tax schemes and incentives and cut social benefits, such as 50% of pensions for working pensioners. Experts doubt that the government will be able to make changes in all directions - to better identify three to five key objectives and implement them.

At the disposal of "b" was a project action plan for the implementation of the program of activities of the Cabinet. document was prepared as soon as possible: the strategy of the government was approved by parliament on 27 February and 3 March the Finance Ministry has already sent a plan of action for approval to the Ministry of Economic Development. Document is striking in its scale - 46 pages written seven global goals to achieve some of these officials will have to do 50-70 jobs before the end of May.

The plan combines the idea of ​​budget sequestration, to be held in late March - before the government promised to reduce the cost of 65-80 billion USD. Already yesterday, Finance Minister Oleksandr Shlapak said the adoption of government regulations on the use of saving money and local budgets. Document introduced a special regime for local authorities - the capital and "any other expenses" will not be funded until the debt will be repaid on energy and salaries. The debt he did not name. "I would ask you to refrain from opening provision for capital expenditure until the end of March - Minister appealed to the heads of regional administrations. - In late 2013-early 2014, 77% of which used the local budgets were used to finance the costs low priority."

Until March 31, local authorities charged with finding an opportunity to increase their revenues by 2% and reduce costs by 1%. According to an expert on the budget of the Association of Ukrainian Cities Slobozhan Alexander, a half year capital expenditure and so practically financed and in January-February, local governments have not received a penny. "Eighteen months the State Treasury is blocking our money. We earn, we want to settle with the contractors, but the money comes only by the courts. At year-end was blocked for more than 6 billion USD, - he said. - We did not make any payment obligation in such costs as it makes no sense, and some debts even in 2012. regions in these debts were made to accounts payable, it is more than 14 billion USD. " Therefore, says Mr. Slobozhan, has nothing to reduce.

But the opportunities to increase the incomes of local budgets regions have, and they will enhance revenues are 2% and 13% (15 billion USD). "Why waste time and again to wait until March 31, when all the bills on income and so are in the Ministry of Finance?" - Said the expert. In particular, we are talking about the return of market fee, the fee for advertising instead of the current payment for advertising. Besides it is necessary to apply the estate tax for all taxpayers and for all categories of real estate. In addition, the Association of Cities asked to change the principle of charging for parking, which works only in Kiev and several cities, and is obliged to pay land tax those who use the land forms of municipal and state property without legal documents for her.

Action plan is traditional for Ukrainian government aims to combat conversion centers and tax pits legalization of shadow turnover of alcohol and alcoholic beverages. It is on the audit of "Ukrspirt" cease and implementation schemes without alcohol taxation. From program to program also migrate Cabinet promises to return capital that are in Cyprus and offshore jurisdictions. But now the government has pledged to address the competent foreign authorities requesting arrest money derived from the Ukraine without taxation. "Makes a statement that will return funds from offshore, but how many are there left who and where is unknown, - says Director of the Center" CASE-Ukraine "Dmitry Boyarchuk. - If you want to close the circuit, then it is quite possible, because all of authorities know where to go to close them. And I would concentrate on schemes because, for example, the gasoline market has been seen that laundered huge money. "

The government is going to raise the excise tax, although the latter indexing them took place in January. This, according to Dmitry Boyarchuk only provoke another increase of the shadow market of excisable goods. Economist of the National Institute for Strategic Studies Alex Moldovan offers an alternative - an increase in the VAT rate on luxury items. The ministry also consider it necessary to analyze the tax benefits for their effectiveness. It is clear that preferences will be canceled for the business in the fields of information technology and publishing. Ex-Minister of Revenue and Duties Alexander Klimenko said inventory tax exemptions, but a bill to abolish preferences and was not prepared. According to Mr. Moldovan, abolish benefits is not necessary, since their validity expires in two years. But it is necessary to cancel the support priority sectors of the economy, since the issuance of preferences is possible only in "manual" mode, the expert said.

"Under the Knife" will and social spending. Already in March, may restrict the payment of pensions to working pensioners - they will only receive 50% of the designated pension payments, but not less than the minimum old-age pension. According to a leading researcher of the Institute of Demography and Social Studies Lydia Tkachenko, it is fraught with layoffs pensioners. "There are pensioners who receive a decent pension, such as scientists, they are unlikely to sacrifice pension. And there are those who work there, where young people do not want - nurses, teachers, - she says. - Experience of the Baltic countries showed that only month resigned 40% of retirees, but it is true, generally abolished retirement. "

One-time payment in the amount of 10 minimum wages and housing young professionals who agreed to work in the countryside, also planned to cancel. Along with this government, like the previous one, wants to reduce the burden of payroll and introduce liability for employers in informal employment. Mindohodov proposed reduction of unified social contribution (ERU) by half - to 18%. "It would be possible to prescribe a phased reduction. And if after liberalization will have no effect, then impose sanctions," - said Mr. Boyarchuk. To reduce the deficit of the Pension Fund in the proposed fee structure ERUs for temporary disability reduced by 0.4 percentage points, while the unemployment - by 0.9 percentage points This will increase the contribution to the pension contributions by 1.3 percentage points "It's certainly good for the Pension Fund, but it is a trifle, but for the unemployment fund cancel almost 1% may be serious", - says Ms. Tkachenko. It focuses on the fact that the document contains no hint of the revision of social benefits with a focus on targeting.

According to her, the shock therapy could be a revision of the amount of support unprofitable coal mines. In terms of this idea is present in part - financing of mines will take into account the requirements of the WTO. In 2012, subsidies amounted to 14.6 billion USD. Experts say the government is repeating the mistakes of the previous government, focusing too detailed development strategies. "And under President Yanukovych wrote the program on pages 50-60. Then adopted a strategy of debt management, but it almost brought the country to default," - says Alex Moldovan. He is convinced that it is necessary to focus on realistic goals, which should be three to five. "All the old ideas, the question in their performance, but it turns out deja vu 2005, high expectations for all - adds Dmitry Boyarchuk. - Otherwise, they wallow in the reforms, and people remain unhappy."
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