On September 20, at the plenary session of the Verkhovna Rada of Ukraine, Minister of Finance Oksana Markarova presented the draft Law of Ukraine “On the State Budget of Ukraine for 2020”.

In her statement, she reminded that “The State Budget is not a declaration and not a wish-list for action, it is the principal financial document of the country, which is based on the macroeconomic forecast and very clear calculations of each figure included in the document, which we will finalize with you in a transparent and effective way, in line with the complete budget review procedure, for the sole purpose of adopting a document in a timely manner, thereby allowing us to achieve our goals: to accelerate the upturn of the economy and the translation of this growth into the prosperity of citizens.”

The Minister stressed that the document presented in Parliament today is realistic and well-balanced. It provides for funding critical state priorities, promotes enhancing the defense capabilities and financing important commitments assumed by the state that include both social and public debt payments, though it is not final and the indicators will be precised before the second reading.

“Opening the land market, launching concessions and privatization, establishing order at the customs and facilitating tax administration, as well as deregulation in labor relations,  will contribute to increased investment, increased exports, increased productivity and, as a result, rapid acceleration of Ukraine's GDP growth. The bills that the VRU is adopting now are both economic and, most importantly, regarding the law enforcement reform and strengthening the rule of law and the judicial reform. We hope that their approval will be reflected in the macroeconomic forecasts and accordingly in the budget”, said Oksana Markarova.

A few details of the draft State Budget before the first reading

Revenues (UAH 1,079.5 billion)

For the first time, no changes to the Tax Code have been submitted with the budget, all revenues are based solely on the current tax base.

The Government plans to submit draft laws on gambling and the legalization of amber production, according to the President's commission. If these laws are approved and signed before the second reading of the State Budget, the revenues could be included in the draft State Budget for 2020.

Expenditures (UAH 1,170 billion)

The emphasis of the State Budget 2020 is placed on the defense and security sector, infrastructure and road network, as well as the human capital development (education and healthcare reforms).

The national security and defense expenditures amount to UAH 245.8 billion, which is by UAH 33.8 billion more than in 2019.

The state budget spendings on the education are planned in the amount of UAH 136.4 billion, that is by 7.7 billion UAH more than in 2019. For the first time, the State Budget draft foresees expenditures for the development of higher education institutions in the amount of about UAH 0.3 billion.

Total healthcare expenditures amount to UAH 108 billion, that is by UAH 9.8 billion more than in 2019.

Expenditures on cultural development and information sphere amount to UAH 8.6 billion, in particular, to support the activities of the Ukrainian Book Institute, UAH 0.1 billion will be spent on the support of the book publishing and popularization of Ukrainian literature in the world, UAH 2 billion will be spent on the development of Ukrainian public broadcasting.

UAH 74.4 billion is planned to be allocated for the development of road infrastructure, which is by UAH 19.3 billion more than in 2019.

Debt

Debt repayment amounts remain high, accounting for more than a third of revenues. Public debt payments in 2020 will amount to about UAH 438.1 billion, of which public debt service - UAH145.2 billion, and repayment of public debt - UAH 292.9 billion.

Collaboration with IFIs

It is planned to leverage UAH 22.662 million investment for the implementation of joint projects with foreign countries, financial institutions and international financial institutions (IFI).