Parliamentarians did not approve the draft law on the transfer of “military” personal income tax from communities to the central budget

"Military" Personal Income Tax

Institute for Economic Leadership

Deputies did not approve the draft law on the transfer of “military” personal income tax from communities to the central budget (for now)
 
2 votes were not enough for the adoption of the draft law, 223 deputies voted “for”. The draft law was sent for a repeated second reading. The parliamentarians also supported shortened terms of preparation for the repeated second reading.
 
We would like to remind you that communities oppose the idea of taking all income from personal income tax to the central budget. This is expected, because in the event of the adoption of the draft law, local budgets will lose revenues of UAH 119.5 billion in the next 15 months. And this is a minus of funds for educational and healthcare institutions, support for families of military personnel and IDPs, quality services for residents. In addition, the decision undermines the achievement of one of the most successful reforms – decentralization.
 
Communities offer deputies alternative solutions — to fix the direction of spending of the collected funds (ie, for example, to prohibit spending them on paving stones or the like) and to deduct only a part of the personal income tax of the military from the state budget, and to leave the rest on the ground.
 
The problem of inefficient and inappropriate spending of funds by local authorities must be solved, but whether it is worth killing the capabilities of communities for this is a debatable question. The tax authorities want to take it from them only for the duration of martial law, but, as you know, there is nothing as eternal as temporary.
 
We expect a re-reading and voting for the draft law.

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