The Ministry of Finance of Ukraine has identified the main parameters that should be used to form local budgets for 2019.

The state budget policy on local budgets and interbudgetary relations in 2019-2021 will be aimed at developing a capable, efficient, transparent and accountable local finance management system geared towards achieving sustainable economic and social development goals.

One of the innovations that will positively affect the revenues of local budgets is the provisions of the Draft Law 6490-d “On Amendments to the Tax Code of Ukraine and Certain Laws of Ukraine on Stimulation of the Establishment and Activity of Family Farming Enterprises”.

Namely, the draft law foresees the introduction of land tax payment for forest land. That is, local budgets have the opportunity to get additional resources through taxation of forest lands.

Besides, the draft law stipulates that enrollment of personal income tax for leased land plots should be carried out at the place of location of such leased land.

Another innovation, planned by the Ministry of Finance, is the enrollment of 5% of the rental fee for the use of mineral resources aimed at extraction of minerals of national significance from 1 January 2019.

Starting from 2019, all local budgets should use the programme-targeted method without exception.

The materials were prepared by the Financial Monitoring Group experts of the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme and SKL International):

• Yanina Kazyuk, financial decentralisation coordinator
• Victor Ventsel, financial monitoring expert
• Ihor Herasymchuk, financial monitoring expert

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