On December 19, Minister of Finance Oleksandr Danyliuk hosted a press conference to present the results of 2017 together with the whole team of his Ministry.
The key points of the press conference referred to the results of the Ministry’s work in the main sectors covering budget and fiscal policy, management of state-owned banks, cooperation with international financial organizations etc.
In his introductory speech, Minister of Finance Oleksandr Danyliuk outlined the working priorities of the Ministry of Finance in 2017 and presented the plans for the coming year.
“We consider it as our top task to improve the attractiveness of our country for investors as well as its competitiveness. We still have a lot to do to make our country a safe and friendly place for business operations and business development, to make banks resume loan supply, to make all public institutions respect budgetary discipline and spend taxpayers’ money in an effective way as well as to improve the quality of the public services. We must rebuild our economy and make it competitive in global terms as well as impervious to external crises”, the Minister of Finance said.
Presenting the Ministry’s results in fiscal policy, the speakers of the Ministry of Finance told about the launch of a transparent register for VAT refund, the tax on distributed capital, the audit reform, the implementation of the BEPS action plan aimed to tackle tax evasion, the establishment of the Financial Investigation Service as well as about the reform of the State Fiscal Service (SFS) and the customs.
State Secretary of the Ministry of Finance Yevgeniy Kapinus said: "One of our main achievements in the fight against corruption this year is the launch of a transparent register for VAT refund. Now, the VAT refund system operates smoothly. Thus, companies can plan their expenses and business process as well as rely on regular VAT refund. It is crucial that this transparent register which operates automatically restores the trust of business and creates equal conditions for each company as well as makes business easier in our country”.
One more priority of the Ministry of Finance in 2017 was the reform of the State Fiscal Service. Yana Bugrimova, advisor to the Minister of Finance, said that this reform consists of two elements: the political and the operational ones. The political element refers to replacing people. However, it is hardly possible to replace the personnel comprehensive within just one year. Presently, the Ministry of Finance is focused on building up proper operational processes within the SFS.
“It is not possible and not necessary to replace the SFS personnel completely. Our crucial task is to engage agents of change with a new work philosophy for the key positions at the SFS. We must automate internal processes at the SFS. First, we must move many services online; also, automation shall cover other processes at the SFS including tax checks. Currently, 60% of SFS services are delivered through physical contacts, whereas globally this figure is three times lower. Most services must be delivered online or through a call centre. We plan to implement it next year. The goal of the SFS reform is to transform it from an overregulated state body into a service-oriented agency motivating people to pay taxes voluntarily”, Yana Bugrimova said.
Another important part of the SFS reform is the customs. Yuriy Draganchuk, adsvisor to the Minister of Finance, presented measures and changes implemented in the customs service in 2017. They include the preparation of the detailed Action Plan for the customs reform in 19 areas, the update of the “one-stop” clearance procedure and its mandatory launch for all customs offices starting from February 1, 2018, implementation of a single account for customs payments, abolition of licenses for customs brokerage activity and other steps.
“Last year, we launched the “one-stop” procedure at the customs. However, business did not start to apply this procedure overnight. Also, the IT systems of the customs offices had to be updated. But now we can already talk about positive trends. In the first month of the operation of the “one-stop” procedure it was used by businesses in only 0.4% of all cases, whereas now this figure is already close to 20%. This are very positive figures, since the experience of countries like the USA, Singapore and South Korea tells us that it takes at least 3 years to implement the “one-stop” procedure”, Y. Draganchuk said.
Another point on the agenda of the press conference was the creation of the Financial Investigation Service which, according to the Minister of Finance, did not succeed in 2017 due to the deliberate delays of this process.
The Minister reminded that the draft law on the establishment of the Financial Investigation Service prepared by the Ministry of Finance had been approved by the Cabinet of Ministers in March 2017, but after that the process was confronted with deliberate delays. However, despite all obstacles, the Ministry of Finance will be making all possible in 2018 to create the Financial Investigation Service.
“The creation of the Financial Investigation Service has two key goals which are to encounter economic crimes effectively and to refrain the law enforcement authorities from illegal pressure on business”, Sergiy Kovalenko, advisor to the Minister of Finance, said.
Another part of the press conference referred to the budget policy. Deputy Minister of Finance Sergiy Marchenko outlined the key figures of the adopted state budget for 2018, told about the change of approaches in financing priority areas as well as presented amendments to the Budget Code which introduce mid-term budget planning in Ukraine.
"The state budget for 2018 is well-balanced and realistic. Despite our tough discussions with the Parliament, we managed to keep the budget deficit at 2.4% and to adopt the new budget planning model. For next year, we expect GDP growth at 3% and inflation at 9%", Sergiy Marchenko said.
At the same time, Yuriy Butsa, Deputy Minister of Finance in charge for the European integration, emphasized that “this year was really a milestone. Thanks to our return to the international capital markets, Ukraine joined a club of countries which proactively manage their public debt. Next year must become not less successful. We see 2018 as a year of state bonds nominated in the Ukrainian currency. We already see foreign investors highly interested in them; hence, our goal for the coming year is to make access to the Ukrainian market easier for international depositary systems”.
Telling about the reform of the state-owned banks, Oksana Markarova, First Deputy Minister of Finance, said: “this year, we followed the development strategy for state-owned banks adopted in 2016 and succeeded in improving the operational models of the banks and significantly reducing the counterproductive competition between them. Each of the state-owned banks got focused on a different business field: Ukrgazbank got active in green banking, Oshchadbank pays special attention to serving small and medium-sized business, Ukreximbank is focused on export and import transactions. I am sure that we will continue our efforts in this direction next year based on the updated strategy for the management of state-owned banks. This strategy is ready, we have finalized our discussions with the supervisory boards of the respective banks and are about to finish the negotiations with our international partners. I hope that only few days remain for the updated strategy for the development of state-owned banks to be presented”.