Minister of finance Natalie Jaresko: «neither law, nor simple logic allow us to propose cut in tax revenues without cutting budget expenses»


Neither law nor simple logic makes it possible to make commitments on a cut in tax revenues without cutting budget expenses. Finance minister Natalie Jaresko made this statement in her today’s press conference at the press-center of the Cabinet of Ministers referring to the discussion about the draft of the tax reform.

«According to our updated estimates, the tax reform [proposed by the Ministry of Finance] brings a cut in tax revenues by additional UAH 60bn. Hence, we must cut the budget expenses by the same amount – approximately UAH 60bn. This is a must according to our legislation aimed to keep our economic stability», the minister said.According to Natalie Jaresko, the Ministry of Finance is ready to cut expenses. «But we need a serious public discussion and complicated political decisions on what expenses we must cut and which ones we must keep.

These decisions must after all be implemented by branch ministries, because the only real resource for spending cuts in Ukraine is saving on healthcare, education, social welfare, security and defense. These are the areas the tax revenues are spent for», the minister said. At the same time, as the minister said, the public is only discussing the tax rates and nobody nobody takes the courage to start a discussion on concrete changes in spending.In this regard, Natalie Jaresko encouraged journalists, experts and public activists to help the Ministry of Finance and to start a public discussion on the correct ways to cut the budget expenses.

The minister of finance emphasized that one of the main spending areas is national security and defense. As she said, she is not sure if Ukraine can afford to cut the military spending not knowing how long the fragile truce in Eastern Ukraine can be kept.

The second important spending area is serving the public debt. «I think, Ukraine has never had a government which did more than our government to reduce the debt burden», Natalie Jaresko said.

Other crucial spending areas are social welfare, healthcare and education. «Hence, we need extremely challenging decisions to cut public spending by, say, UAH 60bn, and these decisions must be a joint product of the branch ministries, the Ministry of Finance, public and the Parliament. This is challenging, very challenging. But the Ministry of Finance thinks that this is possible», the Minister said.

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