The Parliament has legislatively determined that hromadas amalgamated in accordance with the Law and recognised as capable, have also the right to direct transfers with the state budget, apart from the currently defined cities of oblast significance, rayon budgets and budgets of hromadas amalgamated pursuant to the Project plan. According to MinRegion, amendments to a number of articles of the Budget Code of Ukraine were introduced by the Verkhovna Rada of Ukraine, adopting the law No 7116 on Thursday, 7 December.

According to Serhiy Sharshov, director of the department of local self-government and territorial organisation of power of MinRegion, the changes concern hromadas accessed to the already amalgamated hromadas. He specified that the relevant changes were envisaged by draft law 4773, considered by the Parliament for a year and a half and adopted only in the first reading.

“There are many facts of accession to previously amalgamated hromadas in Ukraine, and the question of their transfer to direct interbudgetary relations has not been regulated by law. Today it has finally happened – the law with due account of the provisions of draft law No 4773 has been adopted,” commented Serhiy Sharshov.

In addition to the changes in the Budget Code, the procedure for the formation and implementation of local budgets, interbudgetary relations between the state budget and local budgets has been specified, and the issue of enlistment of revenues from foreign governments, international organisations, donor agencies into the special fund of local budgets has been regulated as well. It is also envisaged that return of excessively withheld (paid) personal income tax amounts from the corresponding budget will be carried out at the taxpayer’s tax address. The law extended the rules for enlistment of 13.44 percent of the excise tax on fuel produced in Ukraine, and fuel imported into the customs territory of Ukraine, into the budgets of local self-government for 2018-2019.

The most debatable issues have been resolved as well:

• the provision on transfer of compensations for the payment of housing and communal services to local government is excluded, and granting of compensations by means of a corresponding state budget subsidy is restored;
• the provision on changing the amount of withdrawals from local budgets to the state budget is excluded, and a reverse subsidy is taken into account in the revised draft state budget on an applicable basis, using 50% rather than 80% of withdrawal.