Klymenko: the government has only increased the fiscal burden on local communities via the words of promising “improvements”
The Cabinet of Ministers charges about UAH three billion per month in the form of tax on income of natural person, meanwhile “compensators” do not cover one-third of these losses in the form of excise tax on retail sales, transport tax and property tax. It was written by Oleksandr Klymenko on his official Facebook page.
The politician explained why does loud statements of the Cabinet of Ministers is not a matter in practice. He also named global problems with the financing and taxation of communities.
In particular, Klymenko reminded about the last report of the Cabinet of Ministers on the growth of incomes of local budgets by almost 50% during January-February 2016. According to the government data, during 2015 local communities have earned UAH 29.6 billion more than in 2014.
He noted that that these indicators are declared by the government as its success and “financial decentralization”. A leader of “Uspіsha Kraina” has dozens of questions concerning the real situation in local communities.
“Unfortunately, this is nothing more than another piece of populism and cheap manipulation of Ukrainian’s opinion. The government managed to demonstrate a formal increase in local revenues the solely by inflation, significant rise in prices and the dollar rate of exchange,” – Klymenko said.
According to the former head of Ministry of revenues and duties, real income has decreased significantly compared to 2014. In fact, the share of local budgets in in total consolidated budget revenues has decreased by 5.3% in 2015. It means that local communities had not received UAH 34.6 billion.
Oleksandr Klymenko believes that the main reason for this is not general economic crisis, but the fact that since January 2015 the government has ordered to leave only 75% tax on personal income in local budgets (40% in Kiev). Meanwhile, nearly 80% of all revenues to local budgets are formed by this tax.
“Before the carrying out catchy governmental reforms, all income had remained in local budgets. What does it mean in practice? For instance, only UAH 4.4 billion has left out of UAH 7.8 billion, which was paid on the development of communities by citizens. The balance of more than UAH 3 billion was allocated to the state budget, which is is divided by government”, – the politician said.
Klymenko notes that in January 2016 the excise tax on retail sales, transport tax and property tax have brought less than UAH 1 billion. It means that it has not compensated even a third part of the loss of tax on income of natural person.
He is confident that in fact, the government has only increased the fiscal burden on business and on the income of ordinary citizens via the words of promising “improvements” for local communities. The main principle of decentralization – the right of territorial community to control independently its funds – has not been implemented.
“Financial flows are controlled by central government as always. It addition, it stills imitate the process of reforms. Unfortunately, the situation will not be changes, no matte who would be appointed as a next minister. There is a strong need for a radical change in approach to taxation and financing of local communities. Only after that we can talk about some decentralization and development of local communities.
However, our current kleptocratic government is not interested in it…” – Oleksandr Klymenko summed up.
Link to source: Oleksandr Klymenko official Facebook page