The State budget of 2016 includes allocations for support of regional development, ongoing decentralization reform, and support of the new amalgamated communities.

This comment, concerning the draft Law “On state budget of 2016”, approved by Verkhovna Rada of Ukraine, was made by Vice-prime Minister, Minister of regional development, construction, and housing and communal services of Ukraine, Gennady Zubko.

“The Government and Vekhovna Rada did not make replenishment of the State Fund for Reforms and Development dependent on other conditions, which could hamper the development of amalgamated territorial communities, particularly, on fund replenishment by finances emerging as a result of realization of confiscated property”, noted Gennady Zubko.

“3 billion UAH are allocated to the State fund of regional development for 2016, 1.94 billion UAH are allocated for social and economic development of regions. The subvention, intended for support of infrastructural projects of amalgamated territorial communities, amounts to 1 billion UAH”, he noted.

Finances from the fund will be targeted at support of amalgamated territorial communities, development of infrastructure and administrative centres of communities.

The official stressed, that all the funds would be allocated from the general fund of the State budget, so they are protected by respective articles and are guaranteed to get to the regions.

According to Vice-prime Minister of Ukraine on January 1, 2016, direct budgetary settlement (not involving oblast and raion levels) of 159 amalgamated territorial communities with the state treasurer’s office will be opened.

Vice-prime Minister of Ukraine told that the state budget provided for allocation of funds for 159 amalgamated territorial communities. Particularly, 284.9 million UAH are allocated for the basic dotation, 1.6 billion UAH – for educational, and 844 million UAH – for medical subventions.

“Small size of the basic dotation indicates, that amalgamated territorial communities are reaching self-sustainability level”, he stressed.

“It is important, that taxation base for replenishment of local budgets remained unchanged from the moment when budget decentralization started – individual income tax, unified tax, excise tax, property tax, land tax etc. All taxes and fees, remaining at the local level, did not change since the beginning of decentralization reform in 2015”, Gennady Zubko underlined.

“In 2016 we expect local budgets to increase in comparison to 2015. Particularly, thanks to extension of their own competencies, reduction of the unified social tax and load on the salary, taking it out from the shade, and increasing it. Beside that, amalgamated territorial communities will get 60% of revenues from individual income tax, just like cities of oblast significance”, Gennady Zubko added.

According to the Minister, another important source of support for regional development comes from governmental capital allocations for oblasts, amounting to 940 million UAH.

Ukrainians can also continue using the state programme of “warm” credits in 2016. The State budget of 2016 envisions the allocation of approximately 800 million UAH for financial support of power efficiency reform.