The draft national budget of Ukraine for 2020 provides for the allocation of UAH 245 billion for national security and defense, which makes up 5.4% of the gross domestic product of Ukraine, Minister of Finance Oksana Markarova has said. “In our spending, we focus on national security and defense. In this budget, UAH 245 billion is allocated for national security and defense. This is 5.4% of GDP. Expenses are allocated based on 2019 expenditures,” Markarova said, presenting the draft national budget in the session hall of the Verkhovna Rada.
“Please note that there appeared a separate budget program, in which additional funds are foreseen for the National Security and Defense Council, which will be distributed by second reading,” she added.
The draft national budget for 2020 foresees UAH 245.8 billion for national security and defense, including UAH 207.8 billion in expenses under the budget programs of the Ministry of Defense, UAH 10 billion in state guarantees, UAH 28 billion in additional expenses from the general fund according to the budget program of the National Security and Defense Council (NSDC) “Unallocated expenses on national security and defense,” which will be distributed separately by the decision of the NSDC.
The deficit of the national budget of Ukraine in January-June 2019 amounted to UAH 871 million, in particular the general fund deficit was UAH 8.67 billion with the target being UAH 22.99 billion, the State Treasury Service has said.
According to the agency, government borrowings for the six months amounted to UAH 246.8 billion, while debt repayment some UAH 210.67 billion.
In general, the national budget for this period received UAH 506.85 billion of revenues, the general fund revenues amounted to UAH 448.4 billion with the target being UAH 476.36 billion.
The national budget expenditures in January-June of this year were at the level of UAH 508.56 billion, in particular UAH 459.33 billion on the general fund with the plan standing at UAH 502 billion.
According to the report of the agency, local budgets in this period posted a surplus of UAH 21.93 billion, while the surplus of the general fund amounted to UAH 39 billion.
The surplus of the consolidated budget in the first half of the year was UAH 21 billion, including UAH 30.38 billion in the general fund.
The National Bank of Ukraine (NBU) will send part of its profit for 2018 in the amount of UAH 64.878 billion to the national budget, Head of the NBU Council Bohdan Danylyshyn wrote on his Facebook page, referring to the decision of the NBU Council. “The Council decided to approve the distribution of profits of the National Bank of Ukraine for 2018 in the amount of UAH 64.878 billion in the following areas: the formation of total reserves of net worth of the National Bank of Ukraine – UAH 3.566 billion; obligations of the National Bank of Ukraine to the national budget of Ukraine for 2018 year – UAH 64.878 billion,” he wrote.
As reported on the website of the NBU, the main components of the profit of the central bank are the interest profit, as well as the results of operations with financial assets and liabilities in foreign currency and financial tools.
Net interest income after the release of reserves for 2018 is UAH 34.9 billion (in 2017 – UAH 45.2 billion). In 2018, the result of currency revaluation for the first time since 2013 became negative due to the strengthening of the hryvnia exchange rate to foreign currencies and amounts to UAH 2.2 billion. A positive result from the revaluation of debt securities at fair value is UAH 6.7 billion (in 2017 – UAH 2.7 billion). Administrative expenses of the NBU and costs associated with the manufacture of banknotes, coins and other products amount to UAH 3.78 billion (in 2017 – UAH 3.59 billion). Also in 2018, funds secured for legal obligations, including lawsuits, in the amount of UAH 2.1 billion were released.
The schedule for transferring part of the NBU profit for 2018 to the national budget will be agreed with the Finance Ministry of Ukraine, the NBU said.
Foreign direct investment (FDI) made from domestic assets was estimated at $485 million in 2018 against $270 million in 2017, the National Bank of Ukraine (NBU) has said in its statement on the so-called “round-trip investment” (when a resident withdraws funds that are then returned to the country in the form of foreign direct investment).
The regulator noted that this amount was 20.6% of the total FDI in Ukraine in 2018, while in 2017 the share of round-trip investment was 10.4%, and 4.1% in 2016.
The central bank added that $106 million of the amount of $485 million mentioned above will be invested in banks (compared to $54 million last year). Round-trip investment in other sectors last year was estimated at $379 million ($216 million in 2017).
In 2010-2018 the volume of residents’ assets that were withdrawn abroad and then returned to Ukraine in the form of foreign investment was estimated at $8.4 billion, or 22% of the total FDI over this period.
According to the NBU, Ukrainian businesses conducted such transactions mostly via Cyprus ($4.1 billion), the Netherlands ($1.54 billion), Switzerland ($530 million), and Austria ($480 million).
The NBU plans to publish such data on an annual basis.
Budget receipts from tourism fee in Ukraine in 2018 increased by 29.2%, to UAH 907 million, and taking into account tax payments the tourism industry raised payments by 20.7% last year, to UAH 4.2 billion, the Ministry of Economic Development and Trade has reported.
“This indicates an increase in the volume of domestic tourism flows and the effectiveness of implementation of the decentralization reform, namely local fiscal discipline improvement,” the agency said.
The ministry added there were also qualitative changes in the structure of foreign tourist flow to Ukraine in 2018. According to the ministry’s press release, the State Border Service recorded an increase in the number of tourists from the countries not bordering Ukraine, particularly Europe: from Spain by 68% Britain by 47.3%, Lithuania by 23.4%, Italy by 15.4%, Germany by 13.3%, and France by 9.2%.
The number of tourists from India over the past year rose by 57.4%, China by 38.8%, Japan by 38.3%, Israel by 21.7%, and the United States by 19%, while cross-border traffic, on the contrary, declined, the ministry said. According to the authority, this was achieved thanks to visa liberalization, and an increased offer of direct and low-cost flights.
National joint-stock company Naftogaz Ukrainy and companies incorporated in it tentatively paid UAH 136.5 billion of taxes and dividends to the national budget in 2018, which is 27.2% more than in 2017. According to the press service of Naftogaz, in particular, dividends were paid in the amount of UAH 29.5 billion, royalties – UAH 28.5 billion, VAT – UAH 37.4 billion, income tax – UAH 23.9 billion.
Naftogaz remains the largest taxpayer to the national budget of Ukraine. Income from the group accounted for about 15% of total national budget revenues in 2018. For comparison, the budget of the Defense Ministry of Ukraine in 2017 amounted to UAH 86.6 billion, and the amount of subsidies for consumed gas financed by the national budget is UAH 55.5 billion, the press service said.
As reported, Naftogaz and its member companies in 2017 paid UAH 107.3 billion in taxes and dividends to the national budget.
Naftogaz Ukrainy unites the largest oil and gas producing enterprises in the country. The holding is a monopolist for transit and storage of natural gas in underground storage facilities, as well as for oil transportation through the country.
