Adoption of the state budget for 2016

This article provides an overview of the #state budget of Ukraine for 2016, including its impact on the #economy of Ukraine and the changes in #Ukrainian law, in particular, the #Tax Code, which had been introduced for the state budget to be adopted.

Visit our website if you are interested in the #Ukrainian economy or #doing business in Ukraine.

On 25 December, the Parliament of Ukraine adopted the state budget for 2016. The Parliament, prior to adoption of the state budget, had to amend some provisions of the Tax Code of Ukraine in order for the basic indicators of the budget to be based on the new tax rules.

The state budget for 2016 provides for revenues in the amount of UAH 595.081 billion and expenses in the amount of UAH 667.733 billion.

The upper limit amount of public debt is expected to reach UAH 1.5 trillion. Thus, such amount was increased by 7.7% in comparison with 2015.

Ukraine’s GDP is forecasted to grow by 2% in 2016 and constitute UAH 2.262 trillion. The inflation rate is set at 12%.

The state budget for 2016 provides for gradual increase of the minimum wage throughout the year. Thus, the minimum wage in 2016 is set at the following levels: UAH 1378 (approx. USD 57) from 1 January, UAH 1450 (approx. USD 60) from 1 May, UAH 1550 (approx. USD 64) from 1 December. The hourly rates are as follows: from January 1 – UAH 8.29, from May 1 – UAH 8.69, from December 1 – UAH 9.29.

The average exchange rate in 2016 is set at UAH 24.1 to one USD.

The state budged also provides from more spending for defense and security purposes in amount of UAH 113.6 billion, or 5% of GDP.

We also note that the Minister of Finance of Ukraine stated that some further amendments to the state budget is required due to the need to comply with the requirements if the International Monetary Fund. Earlier, the International Monetary Fund has issued the statement in which it warned Ukraine that the programme of financial assistance between Ukraine and the Fund might be suspended if the state budget is adopted contrary to the International Monetary Fund’s requirements.

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