STRATEGIC PLAN 2018-2021
To achieve the results in the medium term, the Ministry of Finance of Ukraine identified the following key priorities:
Effective budgeting further implementation of the medium-term budgeting strengthening control over the implementation of the state budget regular review of budget expenditures (initially - on a pilot basis, and then on a permanent basis)
Macroeconomic stability and fiscal risks reduction
Decentralization
fiscal consolidation for further state budget deficit reducing
-
completion of the assessment and debt management reform
Further development of the regions increasing the financial capacity of the regions
Economic growth support tax and customs reforms reducing the pressure on fair business taxpayers foreign investors engagement to Ukraine involvement of the Ukrainian business in public investment and international infrastructure projects corporate governance in state-owned banks
“Public Finance is nothing else than a sophisticated discussion of the relationship between the individual and the state.” Vaclav Klaus, President of the Czech Republic, 2003-2013 There is a reason for comparing Public Finances with the blood circulation system. If everything functions properly - the organism is healthy and able to continue its growth and development. If the blood test shows some disbalance, it indicates that there are some problems in other parts of the organism. But if the blood system itself is affected, then the whole organism suffers. To establish a system for providing the best use of national economy and world markets resources for ensuring the sustainability and economic growth in favor of Ukrainian people is indeed the task of the Ministry of Finance as a state agency responsible for the public finance management. As a public authority, we have all the required tools, standardized approaches, and policies to ensure the fulfillment of this task. Therefore, at this stage, I see four Oksana Markarova, major priorities for us to achieve. Minister of Finance of Ukraine First of all, we should ensure the effective budgeting. Timely and complete financing of the government’s priority initiatives and key reforms, in such spheres as a defense, social security, healthcare, and education, depends on the budget’s quality. The control over the budget deficit is a guarantee for further cooperation with international partners and creditors. This is critically important while so many reforms are implemented in Ukraine today. That is why we are returning to medium-term budgeting, because it will allow us to plan the priorities of the state policy sustainably and responsibly, and to form realistic and well-balanced budgets, taking into account the existing capacity of the economy. This is one of the major reforms that we are currently implementing in public finance, and it will have a great impact on how Ukraine manages its financial resources. Also, we will regularly review budget expenditures: at first - on a pilot and, then on a permanent basis. This will help us to ensure a consistent budget policy and budget discipline. Our second priority is macroeconomic stability and fiscal risks reduction. To cut down the budget deficit, the Ministry of Finance is conducting fiscal consolidation. Our target is to establish the deficit limit level at no less than 2% of GDP by 2020. We have already ensured the deficit reduce by 2.3% of GDP in this year’s draft budget. Besides, we are committed at completing the reform of debt assessment and the public debt management reform. Our goal is to reduce the ratio of public debt to 46% of GDP by the end of 2021. A steady reduction of public debt will have a positive effect on developing cooperation with the IMF under the new program, which is currently being approved. The next priority is to support economic growth. First of all, by creating the conditions and reducing the pressure on fully tax complied business. We are currently working on the State Fiscal Service reform concept that will be focused on tax and customs spheres, with the view to improve their management and help to simplify the administration of taxes and duties. We should emphasize the importance of foreign investors’ engagement to Ukraine and encouraging the national businesses to participate in investments and international infrastructure projects. Building a strong economy without a reliable banking sector is impossible. A significant part of the banking sector currently is owned by the state. Therefore the introduction of corporate governance in state-owned banks is a crucial part of our strategy. This will significantly improve the efficiency of management, restore their stability and profitability as financial institutions operating on a commercial basis, and to reduce the state presence in the banking sector in the future. Finally, the budget decentralization remains our top priority, which aims to increase the financial capacity of the regions and encourage their further development. By improving the inter-budgetary relations, we will assure an efficient allocation of resources while formulating the state budget policy. Our priorities are a direction, and the Strategic Plan of the Ministry’s activities for the next three years is a roadmap. We will discuss it with our key partners and update it every year. The coherent and effective work on the implementation of the Strategic Plan will ensure the financial stability and establish the sustainable budget policy that will enable the effective functioning of the state and accelerate the economic growth.
STRATEGIC PLAN 2018-2021
All information in this document is indicated in accordance with the order of the Ministry of Finance of Ukraine "On Approval of the Strategic Plan of the Ministry of Finance of Ukraine for 2018-2021 years"
The strategic plan has been published with the support of the Governments of Germany and the United Kingdom via the project " Good Financial Governance " implemented by the federal company Deutsche Gesellschaft fĂźr Internationale Zusammenarbeit (GIZ) GmbH. The views or statements expressed in the document do not necessarily reflect the official position of the Government of Germany or the Government of the UK.
CO N T E N T S 1.
Mission and policy areas of the Ministry of Finance of Ukraine
6
2.
Dynamics of the key budget indicators in 2014–2018
10
3.
Strategic goals and objectives of the Ministry of Finance of Ukraine in 2018–2021
12
4.
Analysis of the current situation in activity area according to the defined strategic goals and objectives 2018–2021:
4.1.
Strategic goal No. 1. Increasing the efficiency of allocation and use of the budget funds
15
4.2.
Strategic goal No. 2. Transparent, effective, fair tax and customs systems that contribute to economic development and comply with the EU standards
36
4.3.
Strategic goal No. 3. Financial system ensuring support for macroeconomic stability, effective financial monitoring and use of resources for economic development
43
5.
Strategic goals, objectives and quantitative outcome indicators of the implementation
54
6.
Activities aimed at implementation of the objectives and achievement of the strategic goals
62
7.
Budget programs aimed at financial support for achievement of the strategic goals, implementation of the objectives and activities
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C HAPTER 1
MISSION AND POLICY AREAS OF THE MINISTRY OF FINANCE OF UKRAINE
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
The mission of the Ministry of Finance of Ukraine is to provide the financial support for state functions performance on the basis of ensuring the formation and implementation of well-balanced financial, fiscal and budget policies, creating conditions for stable economic development by ensuring stability of the financial system and management of public finances on the principles of balance, efficiency, impartiality, integrity, sustainability and transparency.
The Ministry of Finance of Ukraine is responsible for the state policy key areas formation and implementation:
Budgetary policy Assurance of predictability, transparency and balance of budgetary policy in the medium term and allocation of resources in accordance with the state development priorities
Financial policy in the following areas Assurance of the effective cooperation on the financial matters with international financial organizations, foreign states and banks; participation in state policy formation of the financial services market and stateowned banks sector development
Tax and Customs policy Establishment of modern fair tax and customs system that ensures achievement of the strategic goals of sustainable economic development
Debt policy Debt sustainability assurance, government debt management and government guaranteed debt
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
The Ministry of Finance of Ukraine is the main body in the system of central executive authorities that ensures the state policy formation and implementation in the areas of:
state assaying control
accounting
lotteries regulation
monitoring of the budget legislation compliance
state internal financial control
treasury service of the budget funds
money laundering prevention and counteraction or terrorism financing
administration of the social security contribution
combating the offenses during application of tax and customs legislation
legislation on payment of the social security contribution
mining, production, use, storage and circulation monitoring of the precious metals and precious stones, organogenic precious stones and semi-precious stones
organization and control over the manufacturing of securities and strict accounting documents
The Minister of Finance of Ukraine directs and coordinates the activities of:
the State Treasury Service of Ukraine
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the State Fiscal Service of Ukraine
the State Financial Monitoring Service of Ukraine
C HAPTER 2
DYNAMICS OF THE KEY BUDGET INDICATORS IN 2014–2018
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
In recent years, the fiscal policy was aimed at consistent implementation of fiscal consolidation according to the IMF program, which allowed reducing the state budget deficit to 1.6% of GDP at yearend 2017. Following the results of 2017, it also became possible to reduce significantly the public debt level relating to GDP ratio. At the same time, raising social standards and strengthening the budgetary support of investment activity in the country, primarily due to increased capital expenditures, contributed to recovery of economic activity in the country.
Indicator
Unit measure
2014
2015
2016
2017
2018
Key budget indicators in 2014–2018 State budget revenues
bln UAH
357,1
534,7
616,3
793,4
917,9
% of GDP
22,5
26,9
25,8
26,6
27,5
% of total volume
78,5
76,6
81,8
79,0
82,8
bln UAH
430,2
576,9
684,9
839,5
991,7
% of GDP
27,1
29,0
28,7
28,1
29,8
Percentage of capital expenditure within the structure of state budget revenues
% of total volume
1,7
3,0
3,9
4,9
4,3
State budget deficit
% of GDP
4,9
2,3
2,9
1,6
2,4
Public debt
% of GDP
59,7
67,1
69,2
61,5
60
Public debt management
% of GDP
3,0
4,2
4,0
3,7
3,9
Percentage of tax revenue within the structure of state budget revenues State budget expenditures
For reference: key macroeconomic indicators in 2014–2018 GDP
Consumer price index, December to December of the previous year Change in real wages Minimum wages (at the year-end) UAH to USD official exchange rate (average)
* ** ***
bln UAH
1 586,9
1 988,5
2 385,4
2 982,9
3 332,3 **
Real change, %
-6,6
-9,8
2,4
2,5
3,0 **
%
124,9
143,3
112,4
113,7
109,0 **
% to previous year
-6,5
-20,2
9,0
19,1
9,6 **,***
UAH
1218
1378
1600
3200
3723 **
UAH/USD
11,89
21,84
25,55
26,60
29,3 **
Budget parameters for 2018 are given in accordance with the Law of Ukraine “On the State Budget of Ukraine for 2018”. Projected macroeconomic indicators that were taken into account in the budget calculations for 2018. Approved by the resolution of the Cabinet of Ministers of Ukraine # 906 dated 01.12.2017 Average monthly salary of employees (gross), adjusted for the consumer price index, as a percentage of the previous year.
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C HAPTER 3
STRATEGIC GOALS AND OBJECTIVES OF THE MINISTRY OF FINANCE OF UKRAINE IN 2018–2021
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Strategic Documents Strategic Plan objectives for 2018-2021
Public Finance Management System Reform Strategy 2017-2020
The Government’s Medium-Term Priority Action Plan to 2020
Association Agreement with the EU
Sustainable Development Strategy “Ukraine - 2020”
Strategic goal 1. Improvement of the effectiveness of budget funds allocation and use Objective 1.1. Implementation of mediumterm budget planning
Objective 1.2. Development of programoriented method in the budget process
Objective 1.3. Effective fiscal risk management
Objective 1.4. Verification of government social payments
Objective 1.5. Development of state internal financial control
Objective 1.6. Accounting and audit reforming
Objective 1.7. Improvement of interbudget relations
Objective 1.8. Enhancement of budget transparency
Objective 1.9. Enhancement of institutional capacity of the Ministry of Finance of Ukraine
Objective 1.10. SFS’ databases monitoring and control
Objective 1.11. Implementation of a new model of healthcare system financing
Objective 1.12. Enhancement of expenditure planning transparency for higher education
Objective 1.13. Monetization of subsidies at the household level
Strategic goal 2. Transparent, effective, fair tax and customs systems that contribute to economic development and comply with the EU standards Objective 2.1. Improvement of the effectiveness of tax system efficiency, stability and predictability
Objective 2.2. Tax base extension
Objective 2.3. Improvement of customs performance efficiency
Strategic goal 3. Financial system that supporting the macroeconomic stability, effective financial monitoring and use of resources for economic development Objective 3.1. Budget balance and debt security
Objective 3.2. Effective and transparent cooperation with the international financial institutions (IFIs)
Objective 3.3. Competitiveness and efficiency of the state-owned banks Objective 3.4. Formation and implementation of the policy on antimoney laundering and combating the financing of terrorism
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C HAPTER 4
ANALYSIS OF THE CURRENT SITUATION IN ACTIVITY AREA ACCORDING TO THE DEFINED STRATEGIC GOALS AND OBJECTIVES 2018–2021
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
4.1. STRATEGIC GOAL NO. 1 IMPROVEMENT OF THE EFFECTIVENESS OF ALLOCATION AND USE OF THE BUDGET FUNDS One of the main objectives of the Ministry of Finance of Ukraine is to provide financing for the State to perform its functions (provision of public services) based upon efficient allocation and use of the state financial resources. A key factor for the successful implementation of this objective is the efficient functioning of the public finance management system.
Objective 1.1. Implementation of medium-term budget planning
The need to strengthen the link between the strategic priorities of the state policy, state budget expenditures and performance results of key spending units requires a change in the approaches of the budget funds managing. Implementation of medium-term budget planning enables ensuring a consistent budget policy and budget discipline, harmonizing the approaches of the legislative and executive branches in fiscal policymaking for the medium term, and also increasing responsibility of the participants in budget process.
Results and achieved goals by 2017 (inclusive)
For implementation of medium-term budget planning for 2015-2017, the Ministry of Finance of Ukraine ensured the arrangement of the following requirements: stability of the annual state budget was increased. According to the amendments made in the Budget Code of Ukraine, the law on the State Budget of Ukraine may be amended only in clear defined cases; approbation of the medium-term budget planning model was provided. The Government approved a project of Major Directions of Budget Policy for the mid-term period, which for the first time identified the expenditure ceilings and budget financing for the key spending units. The Law of Ukraine “On the State Budget of Ukraine 2018” was developed in accordance with the project of Major Directions of Budget Policy for 2018-2020 and state strategic planning, including the Medium-Term Plan of Government Priorities 2020; a legal basis for medium-term budget planning was created. The draft Law of Ukraine “On Amendments to the Budget Code of Ukraine” was submitted by the Ministry of Finance of Ukraine for consideration to the Government in December 2017, approved at the meeting of the Cabinet of Ministers of Ukraine on January 31, 2018 and submitted for consideration to the Verkhovna Rada of Ukraine. At the same time, the draft amendments to the Rules of Procedure of the Verkhovna Rada of Ukraine and to the Law of Ukraine “On the Cabinet of Ministers of Ukraine” were prepared and approved in order to be aligned with the provisions of the updated Budget Code of Ukraine.
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Planned objectives during 2018–2021 The primary objective in 2018 is to support the draft Law of Ukraine “On Amendments to the Budget Code of Ukraine” in the Verkhovna Rada of Ukraine (regarding the legal basis for implementation of medium-term budget planning) and the draft Law of Ukraine “On Amendments to Certain Legislative Acts on the Implementation of Medium-Term Budget Planning. The subsequent implementation of these laws is expected. The Draft Law of Ukraine “On Amendments to the Budget Code of Ukraine” provides for introduction of a budget declaration as a document of state strategic planning, which defines the principles of budgetary policy in the medium term, strengthening of accountability and increased responsibility of key spending units for the performance results in the relevant areas. Furthermore, the Ministry of Finance of Ukraine is planning to perform key objectives during 2018: Key objectives in 2018-2021
Expected outcomes
Analysis of the possibilities of a budget margin implementation and application to create a planning reserve
Executive summary on possible models of using the budget margin to reduce the negative impact of the failure of macroeconomic and budget forecasts in the medium-term budget planning
Terms of References preparation and development of modern software, including for providing the mediumterm budget planning
Increasing the level of automation and efficiency in budget planning due to introduction of a modern information and analytical system
Training of the key spending units on the application of improved budget planning tools
Gaining the practical skills in the area of budget indicators planning by key specialists
Quality monitoring of impact assessment of the adoption of draft laws and regulations on the budget
Development and approval of a new methodology for assessing the impact of draft laws and regulations on the budget
Introduction of the medium-term budget planning and development of the program-target method
Institutional capacity for medium-term budget planning strengthening, analysis of fiscal and tax policies, and evaluation of the budget programs effectiveness
Objective 1.2. Development of program-oriented method in the budget process
Improvement of the program-oriented method is an integral part of the budget reform aimed to increase the responsibility for performance results of key spending units, to provide public with the information on the quality of public service, and to increase the effectiveness of using the budget funds by key spending units. Results and achieved goals by 2017 (inclusive) In 2017 the Ministry of Finance of Ukraine conducted the preparatory work on horizontal and sectoral cost estimates according to the framework of the introduction of a comprehensive efficiency assessment and spending expediency in order to ensure economies and deallocation of resources for new priorities. For the purpose of sectoral assessment, a resolution of the Cabinet of Ministers of Ukraine “On the Review of Budget Expenditures in Certain Areas” was drafted and submitted to the Cabinet of Ministers of Ukraine, and then adopted on February 21, 2018 under No. 101.
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S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Planned objectives during 2018–2021
In 2018 and in the medium term, the Ministry of Finance of Ukraine will ensure the implementation of a sectoral and horizontal spending review as a modern tool for budget analysis and budget management for assessing the effectiveness and expediency of expenditures and identifies new areas for such reviews. In addition to the review of expenditures, it is supposed to improve the requirements for budget programs performance indicators and methodological framework for assessment of budget programs effectiveness. For further improvement of the program-oriented method, the Ministry of Finance of Ukraine is planning to perform key objectives during 2018:
Key objectives in 2018-2021
Expected outcomes
Сonduction of the regular expenditure reviews in ministries
Recommendations on improvement of the state policy implementation and effectiveness of budget expenditures in specified areas
Improvement of the system of performance indicators of budget programs
Clear representation of the strategic goals achievements and meeting the requirements of public services recipients
Update of the methodology for monitoring and assessment of effectiveness of budget programs, development of the program-oriented method
Improvement of organizational and methodological frameworks for assessment of budget programs effectiveness. Evaluation of the budget programs effectiveness in accordance with the updated methodology
Objective 1.3. Effective fiscal risk management
The lack of an integrated fiscal risk management system negatively affects the reliability of fiscal policies. This has negative consequences for the sustainability of public debt and the efficient allocation of public resources in accordance with the priorities of public policy. Public finances in Ukraine are susceptible to several significant financial risks, which include the risks associated with state-owned enterprises and state property management, public debt and state guarantees, the financial sector and changes in the macroeconomic situation.
Results and achieved goals by 2017 (inclusive)
In 2017 the Ministry of Finance of Ukraine for the first time prepared and included in the Budget 2018 Information on fiscal risks and their potential impact on the state budget in 2018. Furthermore, in order to implement the fiscal risk management system in Ukraine, the Ministry of Finance in 2017 was actively engaged in preparation of a legal framework for the fiscal risk management, in particular: methodology for fiscal risks assessment related to the activities of public sector economic entities was developed and approved; regulations on the fiscal risk assessment were developed and included into the draft Law of Ukraine “On Amendments to the Budget Code of Ukraine (regarding the legal basis for implementation of medium-term budget planning)”; amendments to the Strategy for improving the operating efficiency of public sector business entities were developed and approved. 19
STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Planned objectives during 2018–2021
In order to enhance effectiveness of the fiscal risk management during 2018-2021, the Ministry of Finance of Ukraine is planning to implement advanced fiscal risk management systems and determine their potential impact on the state budget in order to take timely measures for their mitigation in accordance with best international practices. In particular, during 2018 the following key objectives are planned:
Key objectives in 2018-2021 Elaboration and submission of the expanded methodology draft for fiscal risk assessment to the Cabinet of Ministers of Ukraine
Expected outcomes Implementation of fiscal risks management:
• • • • • •
macroeconomic situation state-owned enterprises and management of state property state guarantees extra-budgetary funds local borrowing public-private partnership.
Strengthening the institutional and analytical capacity for risk assessment, scenarios development, as well as expected fiscal impact
Delimination of the competence of the Ministry of Finance of Ukraine in fiscal risk management
Terms of References development on creation of the information and analytical system for processing the fiscal risk data
Terms of References approval to automate the fiscal risk management processes and increase their efficiency. Improvement of information exchange and inter-agency coordination of fiscal risk management measures
Conducting a comprehensive assessment of fiscal risks and the impact on the state budget
An extended report on fiscal risks impact
Objective 1.4. Verification of government social payments
The Government has set an objective to Ministry of Finance of Ukraine to ensure the implementation of the state payments verification as an effective tool of a transparent social security system development, public benefits targeting and budgetary expenditures optimization. The verification process is aimed to ensure that the final beneficiaries are those citizens in need of the State assistance.
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S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Results and achieved goals by 2017 (inclusive)
In the context of government payments verification, the Ministry of Finance of Ukraine elicited numerous facts of the information mismatches whereby the government payments have been entitled and delivered. In consequence of the work results, the recommendations to the authorities that make government transfer payments on suspension or termination of such were provided. Implementation and advancement of the payment verification in 2017 empowered to improve the work of the bodies that make social payments, improve maintenance of information databases and registers, and also contributed to correction of inaccuracies and mismatches made in the process of their maintenance.
Planned objectives during 2018–2021
The Ministry of Finance of Ukraine takes measures to implement the Information and Analytical Platform for electronic verification and monitoring for the purpose of providing an effective model for government payments monitoring and improvement the efficiency and quality of verification. The platform is expected to be introduced into operational testing during 2018. In 2018 and in the subsequent years, the Ministry of Finance of Ukraine will continue its work on legislative regulation of the main legal and organizational principles for verification of government payments in Ukraine, increase the targeted orientation of government payments and prevention of the budget losses by verifying the information provided by individuals for assignment, accrual and/or payment of all types of government transfer payments.
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Objective 1.5. Development of state internal financial control
In accordance with the commitments undertaken within the framework of implementation of the Association Agreement between Ukraine, on the one hand, and the European Union, European Atomic Energy Community and their Member States, on the other hand, Ukraine is in the process of implementing the state internal financial control. The state internal financial control system is developed through the implementation of the measures aimed at the internal audit support (improvement of the internal audit methodology and appropriate training activities for internal auditors) and development of internal control (implementation of pilot projects for internal control and training activities), as well as improvement of the institutional capacity of the Department for Harmonization of Public Internal Financial Control (CHU - Central Harmonization Unit).
Results and achieved goals by 2017 (inclusive)
During 2017 the Ministry of Finance of Ukraine ensured the consistent implementation of measures to develop the PIFC as an integral part of the public finance management reform, in particular: from January 1, 2017, in accordance with the best international practices, the authority to perform the function of harmonization of PIFC has been transferred from the State Audit Service to the Ministry of Finance of Ukraine through the establishment of the Department of PIFC Harmonization; with the assistance of the international partners, the Bilateral Cooperation Program and the Roadmap have been developed to support the PIFC further development. An assessment (review) of the overall situation of development and functional capabilities of the internal audit units in Ukraine was also provided, and these results will set the priorities for further development of this function; legal regulation in the area of PIFC was improved, the Procedure for assessment of the internal audit system was adopted by the Ministry of Finance of Ukraine; 7 training events were held in cooperation with the Dutch experts, which resulted the skill improvement of 180 internal auditors.
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S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Planned objectives during 2018–2021
During 2018-2021, the Ministry of Finance of Ukraine will ensure further development of state internal financial control by harmonization with the internationally recognized standards and methodologies and the best European practices.
Key objectives in 2018-2021
Expected outcomes
Conduction of an assessment (review) of the internal control functioning coordinated with the Dutch experts
Proposals on the measures aimed at further development of internal control and implementation of the best European practices in this area
Implementation of the pilot projects on internal control and internal audit
Recommendations based upon the results of pilot projects aimed at improvement of the overall organization of internal control, including formation of the structure of internal control, risk management, supervision of internal control, as well as improvement of internal audit activities
Improvement of the methodological support for internal control and internal audit
Harmonization of methodological support regarding public internal financial control with internationally accepted standards and methodologies and the best European practices
Update and implementation of the skill improvement program for internal auditors
Gaining the practical skills and knowledge regarding PIFC by the relevant specialists
Conduction of training activities on internal control and internal audit (trainings, workshops, roundtables)
External evaluations of the quality of internal audits in ministries, other central executive authorities, regional administrations and Kyiv city state administration
Recommendations for internal audit improving
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Objective 1.6. Accounting and audit reforming
In accordance with the requirements of EU legislation relating to accounting and auditing, International Financial Reporting Standards (IFRS), International Public Sector Accounting Standards (IPSAS) and strategic documents for public finance management and accounting, reforming of accounting and audit, as well as accounting and financial reporting system in the public sector, will be conducted.
Results and achieved goals by 2017 (inclusive)
The Association Agreement between Ukraine and the European Union determinates that the Parties have agreed to cooperate, in particular with regard to implementation of the relevant international standards at the national level and gradual approximation to the EU law in audit and accounting. In order to bring the national accounting legislation into compliance with the requirements of the EU legislation in this regard, the Ministry of Finance of Ukraine developed a Draft Law of Ukraine “On Amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”. The Verkhovna Rada of Ukraine adopted the Law of Ukraine No. 2164-VIII, October 05, 2017 “On Amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”, which came into effect on January 01, 2018. The adopted Law will improve the legislative framework for accounting and financial reporting in accordance with the provisions of European legislation, and also increase the level of transparency and comparability of financial reporting indicators of domestic companies, therefore contributing to improvement of the investment climate in Ukraine. The Ministry of Finance of Ukraine developed a Draft Law of Ukraine “On Financial Audit and Audit Activities” for the purpose of harmonizing the national audit legislation with regulations of the European legislation in the relevant field. The Verkhovna Rada of Ukraine adopted the Law of Ukraine No. 2258-VIII dated December 21, 2017 “On Financial Audit and Audit Activities”, which came into effect on February 07, 2018 and will be introduced on October 01, 2018. Implementation of the audit reform in Ukraine will ensure the increased level of investor confidence in the financial statements of domestic enterprises, increased level of confidence in the activities of national auditors, make it impossible to provide unsatisfactory audit services, and also enhance transparency and reliability of financial statements of securities issuers, banks, insurance companies, other public companies, including state-owned enterprises and open access to European markets for Ukrainian auditors. The adopted laws of Ukraine comply with Ukraine’s commitments regarding the European integration, in particular in respect of execution of the Association Agreement in terms of implementation of EU regulations. The Ministry of Finance of Ukraine took measures to improve the accounting system in the public sector as a result of implementation of the Strategy for Modernization of the Public Sector Accounting 24
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
System for 2007-2015 and the Strategy for Development of the Public Finance Management System. In particular, there were approved: 20 national accounting provisions (standards) in the public sector (NAP(S)PS) developed on the basis of international accounting standards in the public sector, and methodological recommendations for their application; the accounting plan in the public sector, developed in accordance with the budget classification. Contains sub-accounts to represent operations on budgets implementation, key spending units and state specialized funds, and the application procedures;
forms of financial reporting and filling out procedures;
a standard provision on the accounting service of a budgetary institution;
recommendations on comparison of classifications of incomes and expenditures in national standards with the budget classification of incomes and expenditures, etc.
Planned objectives during 2018–2021
The main objective of the Ministry of Finance of Ukraine for 2018-2021 in this direction is:
preparation of regulatory acts in accordance with the Plan for preparation of draft acts to ensure the implementation of the Law of Ukraine “On Amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” regarding the improvement of certain provisions” No. 2164-VIII dated October 05, 2017 approved at the meeting of the Cabinet of Ministers of Ukraine dated November 22, 2017 (Protocol No. 66); preparation of regulatory acts in accordance with the Plan for preparation of draft acts to ensure the implementation of the Law of Ukraine No. 2258-VIII dated December 21, 2017 “On Audit of Financial Reporting and Auditing Activities” approved at the meeting of the Cabinet of Ministers of Ukraine dated February 28, 2018 (Protocol No. 8); approval of the updated Strategy for Modernization of the Public Sector Accounting System and implementation of the appropriate action plan.
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Key objectives in 2018-2021
Expected outcomes
Development and approval of the regulatory acts in the field of accounting
Harmonization of regulatory acts in the field of accounting into compliance with the Law of Ukraine “On Amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”
Development and approval of the regulatory acts in the field of audit
Harmonization of regulatory acts in the field of audit into compliance with the Law of Ukraine “On Audit of Financial Reporting and Auditing Activities”
Development and approval of the regulatory acts on the national accounting provisions (standards) in the public sector
Assurance of the effective legal and regulatory framework for accounting in the public sector
Development of a training program for specialists of the public sector entities on the application of national accounting provisions (standards) in public sector
Improvement of the professional competence of specialists in the field of accounting in the public sector
Development of the integrated information and analytical system for information exchange and consolidation of financial reporting using databases and information systems
Development of analytical system
Harmonization of the Ukrainian legislation in the field of accounting and auditing within the EU standards
Implementation of the statements of the Directive 2006/43 /EC and Directive 2013/34 / EC
the
integrated
information
and
Objective 1.7. Improvement of inter-budget relations
Improvement of inter-budget relations is one of the key objectives in the context of increasing the efficiency of resource allocation at the level of the state budget policy formation. The Ministry of Finance of Ukraine actively participates in the process of decentralization of power, creation of appropriate material and financial conditions to ensure that local self-government bodies perform their own and delegated powers, for provision of local self-government bodies with fiscal instruments to increase their own resources and reduce their financial dependence on the central government. Within the framework of the Concept for the Reform of Local Self-Government implementation, active work is being provided on the formation of capable territorial communities. The budgets of the united territorial communities acquire the same budgetary powers as budgets of regional significance and transfer to direct relations with the state budget and receive inter-budget transfers directly. More than 3,000 small-scale territorial communities have been enlarged due to the voluntary association process in 2015-2017.
Results and achieved goals by 2017 (inclusive)
Since 2015 the reform of the budget system has begun and a new model of inter-budget relations has been introduced. Due to implementation of the reform of inter-budget relations, it became possible to achieve the following results:
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new progressive relations in budgetary resources management have been established;
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the level of financial support for local budgets has been increased; the revenue capacity of local budgets has more than doubled; created conditions for motivating local governments to increase the revenue base for local budgets; local state bodies were given the right to establish the local tax rates at their own discretion within the limits set by the legislation and provide benefits for payment thereof; the system of inter-budget equalization has been changed: the mechanism of balance of expenditure powers was replaced by a more progressive model, that allows to leave most of the funds on the local level (the horizontal equalization of the local budgets’ capacity); the system of vertical balancing of expenditures was replaced by the horizontal equalization of local budgets’ fiscal capacity; provision of high-quality public services to consumers was ensured due to expanding the expenditure powers of local self-government bodies;
investment resources of local budgets were increased;
the range of local budgets that have relationship with the state budget was expanded.
Therefore, a matter of full budgetary autonomy and financial independence of local budgets has been regulated at the legislative level, thereby complying with the major objectives of the Concept of Reforming the Local Self-Government and Territorial Organization of Power in Ukraine.
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Planned objectives during 2018–2021
In the State Budget for 2018, 1288 budgets established relations with the state budget, with 665 thereof being the budgets of the united territorial communities. The number of budgets of the united territorial communities has increased by 299 as compared to the number of those in 2017 and by 506 in 2016. Their number will increase every year, thereby ensuring implementation of one of the directions of the inter-budget relations reforming – transition to a two-level budgetary system relations (state budget – local budget). Within the period of 2018 to 2021, the Ministry of Finance of Ukraine is focused to continue the development of inter-budget relations by introducing the medium-term budget planning and programoriented method improvement at the local level: Key objectives in 2018-2021
Expected outcomes
Development of general recommendations for local state bodies on determination of mechanisms for citizens participation in the budget process
Strengthening the influence of the public on the use of local finances
Development of general recommendations for local state bodies on the preparation and approval of budget regulations
Enhancement of the financial transparency accountability of local self-government bodies
Improvement of the mechanism of equalization of local budgets fiscal capacity. The extension of the tax base for to local budgets incomes
Reduction of budgetary imbalances between the local budgets. Formation of the balanced local budgets. Establishing the incentives to increase the tax capacity of territories and efficient use of funds
Development of methodological recommendations on the preparation of the medium term local budgets, consistent with the methodology of the state budget medium-term planning
Strengthening the capacity of territorial communities to develop the medium term local budgets
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Objective 1.8. Enhancement of the budget transparency
Implementation of the principles of efficiency and effectiveness, publicity and transparency implies an effective system of key indicators of efficiency and tools for the public awareness-raising in respect of drafting, consideration, approval, implementation of state and local budgets, as well as implementation monitoring. The objective is to implement the Information and Analytical System “Transparent Budget” and ensure its operational testing, including the module “Budget for Citizens”, for the budget process transparency and creation of a mechanism for the public participation.
Results and achieved goals by 2017 (inclusive)
In accordance with the Law of Ukraine “On the Openness of the Use of Public Funds” in 2015 the development of a single web-portal of budgetary funds use was started in order disclosure of the information about the public funds. In 2017 a single web-portal on the use of public funds was introduced (https://spending.gov.ua). Ukraine’s rating in the Open Budget Index increased from 46 points in 2015 to 54 in 2017.
Planned objectives during 2018–2021 Key objectives in 2018-2021
Expected outcomes
Implementation of the pilot operation of the “Budget for Citizens” module within the framework of the information and analytical system “Transparent Budget”
Increasing the transparency of the budget process
“Budget for Citizens” publication and presentation
Publication of the Budget key indicators visualization on the official web-site
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Objective 1.9. Enhancement of the institutional capacity of the Ministry of Finance of Ukraine
Increasing the institutional capacity of the Ministry of Finance of Ukraine in formation and coordination of the state policy and strategic planning, participation in public administration system reforming, increasing professionalism, accountability and effectiveness of employees are the priority areas of reforming. The increase of institutional capacity also depends on the level of internal processes automation and introduction of the modern technologies in the area of information and telecommunication infrastructure.
Results and achieved goals by 2017 (inclusive)
PUBLIC ADMINISTRATION REFORM
The Ministry of Finance of Ukraine is involved in the public administration reforming process. The Ministry of Finance has been selected as one of 10 pilot ministries, in which new departments were established (the Directorate of the Strategic Planning and European Integration), and new reform support positions (the RSPs) were introduced. The Ministry of Finance of Ukraine achieved the following results within the framework of the implementation of the Concept for the introduction of RSPs: the functional analysis in identification of the key policy areas of the Ministry of Finance was performed, which resulted the categorization of functions into “political” and “non-political”; the updated organizational structure was approved and 6 Directorates were established, with 98 positions of reform experts provided therein; missions, goals, core responsibilities and areas of state policy formation for each Directorate were determined; competitive procedures were implemented, 514 applications to the Directorate of Strategic Planning and European Integration were received for vacant positions of reform experts.
ESTABLISHMENT OF THE EFFECTIVE HUMAN RESOURCES MANAGEMENT SYSTEM
During 2017 the Ministry of Finance of Ukraine took a measures aimed at establishing an effective system of human resources management in accordance with the best international practices along with participation in public administration system reform: measures to determine the objectives, key performance indicators, efficiency and quality of civil servants activities in the administration of the Ministry of Finance of Ukraine were provided for evaluation of the official results of civil servants activity; in particular, the connection between these objectives for 2018 and the strategic objectives of the Ministry of Finance was established; 30
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the staff survey was conducted using the best international practices; the results were applying in a relevant Action Plan preparation to enhance motivation and professional competence and the implementation of certain activities for this period was provided; cooperation with educational institutions was established and new educational services were involved, including short-term trainings, workshops, etc.; a Schedule of trainings for employees of the Ministry of Finance of Ukraine was developed and 316 employees of the MoF improved their skills.
IT CAPACITY INCREASING
As of the beginning of 2017 the information and telecommunication infrastructure of the Ministry of Finance of Ukraine were in satisfactory condition and required prompt and effective measures in IT equipment upgrading. During 2017 the following results were achieved:
the cryptographic information security and data storage system have been updated;
equipment for the main and reserve data center was acquired;
hardware equipment and licensed software for all employees were provided.
Planned objectives during 2018–2021
In the medium term perspective the Ministry of Finance of Ukraine plans to increase its institutional capacity, introducing the best international HR management practices for the purpose of professional and personal development of employees, and also to provide automatization of the main processes and integration of the existing software solutions. Key objectives are planned to implement during 2018:
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Key objectives in 2018-2021
Expected outcomes
Public Administration Reform Conduction of competitive procedures for the positions of policy directorates
The competitions for the reform experts positions were organized
Development of the Regulation of the project management implementation, standards of project documentation and methodological recommendations
Increasing the effective performance of strategic objectives and implementation of modern approaches of project activities in the MoF
Functional audit of the Ministry of Finance
Exclusion of duplicate and unusual functions
Implementation of the monitoring system for strategic goals and operational objectives
Increasing the level of control and reporting in implementation of strategic goals and operational objectives
Establishment of an effective human resources management system Measures for development and preparation of the HR strategy for the Ministry of Finance of Ukraine
Identifying the main directions, goals and principles of HR management and suggestions for its development at the stage of HR strategy implementation
Approval of the Procedure for determining the needs in professional training for employees of the Ministry of Finance of Ukraine
Organization of trainings for employees and determination of training needs in accordance with the strategic objectives of the Ministry of Finance of Ukraine
Increasing the IT capacity Conduction of the IT Audit in the Ministry of Finance of Ukraine
Assessment of the current status of IT infrastructure, security level, development and integration opportunities
Development and approval of the Strategic Plan for IT infrastructure Development (IT Strategy)
Identification of directions for the IT infrastructure further development, improving their efficiency and automation level
Introduction of the electronic document management system
Full transition to paperless document circulation to improve the effectiveness and efficiency of workflows
Introduction of a methodological basis (security policies), as well as software and technical solutions to secure the information
Establishment of a stable and reliable IT architecture
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Increasing resources
the
security
level
of
the
information
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Objective 1.10. SFS’ databases monitoring and control
Development of a complex of software and hardware measures for analysis of information in the databases and information resources of the SFS used for administration of taxes, fees and other compulsory payments for the purpose to create the monitoring systems.
Results and achieved goals by 2017 (inclusive)
To comply with the requirement of the paragraph 1, clause 5, section II “Final and Transitional Provisions” of the Law of Ukraine No. 1797-VIII of December 21, 2016 “On Amendments to the Tax Code of Ukraine for Improving the Investment Climate in Ukraine”, based on the Resolution of the Cabinet of Ministers of Ukraine No. 484 of June 21, 2017, the Regulations on the interdepartmental working group on the independent audit of databases and information resources used by the SFS (hereinafter referred to as the interdepartmental working group) were approved. The interdepartmental working group was conducted from June 29, 2017 to September 01, 2017 and representatives of the following organizations were involved: Ministry of Finance of Ukraine, Security Service of Ukraine, State Service of Special Communication and Information Protection of Ukraine, State Agency for E-Governance of Ukraine, and the State Enterprise “Ukrainian Special Systems”. The report of the interdepartmental working group on the results of auditing the databases and information resources used by the SFS was submitted to the Cabinet of Ministers of Ukraine by the letter No. 26000-04-3/26, confidential dated January 31, 2018. For implementation of the requirements of the above-mentioned resolution of the Cabinet of Ministers of Ukraine regarding the control system establishment, including monitoring the administration by SFS of databases and information resources, the software of the Oracle business intelligence system and the necessary equipment were purchased, in particular: SAN switches, IBM Power System S822 servers, cryptographic information security equipment for fiberoptic communication system between the Ministry of Finance of Ukraine, SFS and the State Treasury Service of Ukraine.
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Planned objectives during 2018–2021
The reporting indicators and data structures of the SFS used in tax administration with a view of establishing a system for monitoring the SFS reporting indicators are planned to analyze and summarize in 2018-2021. It is planned to provide the software and hardware measures to identify the potential threats of interference in the operation of databases and the SFS information resources and the effective methods for their prevention in order to develop a system for detecting and preventing the threats of external and internal interference. Key objectives in 2018-2021
Expected outcomes
Development of reporting forms for the information resource of the Ministry of Finance of Ukraine
Implementation of one of the stages of the monitoring system for the SFS reporting indicators
The order of development, analysis and monitoring of the SFS’s reporting indicators
Development of a monitoring system for SFS reporting
Determination of types of the external potential threats intervention in the operation of databases and the SFS’s information resources and effective methods of their prevention
Development of the information system for identifying and preventing the interference threats with the operation of databases and information resources of the SFS
Objective 1.11. Implementation of a new model of healthcare system financing
For the purpose of effective use of budget funds for public healthcare, improving its quality and accessibility, it is necessary to change the model of healthcare system financing by transition from maintenance of a network of public and communal healthcare institutions (maintenance of buildings, patient capacity and medical staff regardless of the quantity and quality of medical services provided) to payment for the performance results and for the medical services actually provided to patients.
Results and achieved goals by 2017 (inclusive)
According to the Order of the Cabinet of Ministers of Ukraine “On Approval of the Concept of Healthcare Financing Reform”, the regulatory acts have been adopted that determine: introduction of a program of public healthcare state guarantees (health insurance programs), that provides a scope of medical services and medications, the full payment of which is guaranteed to patients by the State due to the State Budget of Ukraine according to the tariff; the phased change of the healthcare expenditures differentiation between the state budget and local budgets in connection with introduction of the health insurance programs; implementation from April 1, 2017 of medical reimbursement during ambulatory treatment of people with cardiovascular diseases, diabetes mellitus type II, bronchial asthma. The Law of Ukraine “On the State Budget of Ukraine 2018” provides expenditures for implementation of the state guarantees program for primary health care from July 1, 2018. In 2017, according to the proposal of the Ministry of Finance of Ukraine and the National Academy of Medical Sciences, a pilot project was launched. The project provides the transition from the maintenance of four clinics of research institutes of the National Academy of Medical Sciences to the payment for the services of tertiary (highly specialized) medical centers provided. 34
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During its implementation in 2017 the citizens were provided with more than 8 thousand services of highly specialized expensive medical care. However, the short term of the pilot project did not allow to launch a new model in full and make all services completely free for patients (70% of the services cost were at the expense of the state budget, 30% of the cost of services were additional payments made by the patients for medicines and medical products at their own expense).
Planned objectives during 2018–2021 Key objectives in 2018-2021
Expected outcomes
Implementation of the medical care guarantees program for primary health care from July 1, 2018, establishing a capitation rate and adjustment factors for payment of primary public healthcare
Gradual introduction during 2019-2020 of the state guarantees of public healthcare under the program of medical care guarantees for other types of medical care, in particular by implementation of pilot projects for certain types of medical services, individual healthcare institutions or regions
Increasing the efficiency of budget funds to provide public healthcare and improve the quality and availability of the healthcare
Further implementation of the program on compensation of the cost of medicines (reimbursement) during outpatient treatment of people with increase in the number of medical conditions covered by the program Further implementation of the pilot project of the financial support mechanism for medical care provision in four clinics at the research institutes of the National Academy of Medical Sciences
Objective 1.12. Enhancement of the expenditure planning transparency for higher education
In accordance with the Article 87 of the Budget Code of Ukraine, expenditures for higher education are paid from the state budget (payment for education of specialists, scientific and academic staff on the public contract conditions in the state-owned higher educational institutions of III-IV accreditation levels, e.g. universities, academies, institutes). However, as practice shows, the public contract indicators are actually formed based upon the principle of maintenance of a higher educational institution, rather than with account of the government needs in preparation of specialists with higher education. Annually there is an underperformance of the approved public contract volumes (5.5 thousand people in 2013, 25.3 thousand people in 2014, 8.4 thousand people in 2015, and 14.8 thousand people in 2016). It should be noticed that, despite the failure to fulfill the planned volumes of admissions to higher education institutions, expenditures for higher education were not reduced, thus resulting in 1.2 billion UAH of budget funds ineffectively used in the last four years.
Results and achieved goals by 2017 (inclusive)
Changes to the Budget Code of Ukraine, that establish the volume of state budget expenditures for higher education is distributed among higher educational institutions on the basis of the formula were provided by the initiative of the Ministry of Finance of Ukraine. 35
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The formula is developed by the central executive body, which ensures the development and implementation of the state policy in the field of education, and is approved by the Cabinet of Ministers of Ukraine with the following parameters: the number of applicants for higher education according to the academic levels and specialties and the ratio of the cost for the educational services;
the level of external independent evaluation of matriculated students;
quality indicators of educational and scientific activities of a higher educational institution.
Planned objectives during 2018–2021 Key objectives in 2018-2021
Expected outcomes
Evaluation and analyzing the effectiveness of spending costs on training for higher education institutions
Participation in preparation of proposals and calculations on the introduction of allocation of state budget expenditures for higher education on the basis of a formula
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Increase the efficiency of use of budget funds for higher education
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Objective 1.13. Monetization of subsidies at the household level
Introduction of monetization of subsidies in Ukraine is an important and responsible step in the social protection system reforming. Transition from the outdated model of subsidies to their monetization is the significant approach for energy efficiency and economical use of energy resources. Monetization of subsidies at the household level is the final stage of the subsidies monetization and is intended to ensure the state policy reforming in the system of subsidies, increase their targeting and strengthen control over expenditures in this regard. Accessibility and transparency in implementation and administration of this program will eliminate the possibility of abuse and corruption.
Results and achieved goals by 2017 (inclusive)
During the reporting period, preparation and legal regulation were implemented in terms of introduction of the first stage of monetization of payments for subsidies at the level of service providers. Therefore, from the year 2018 the budget funds for subsidies are transferred directly for the actually consumed resources and services provided, which makes it impossible to obtain more subsidies than households have consumed. Introduction of the direct settlements with service providers with clear deadlines for transfer of funds provided a transparent and targeted direction of budget funds and increased control over their use.
Planned objectives during 2018–2021
Monetization of subsidies at the household level is the next stage, that provides the subsidies to the citizens as a payment of housing and public utility services in cash form at the final consumer level. For this purpose, it is necessary to ensure the single register establishment with a regularly updated database of the grantee households and their verification, that provides for a complete inspection of income of the subsidies recipients.
Key objectives in 2018-2021
Expected outcomes
Development and approval of a mechanism for subsidies providing to the citizens for payment of housing and public utility services in cash form at the final consumer level from January 1, 2019
Preparation of the legal basis for monetization of subsidies at the household level
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4.2. STRATEGIC GOAL NO. 2. SIMPLE, EFFECTIVE, FAIR TAX AND CUSTOMS SYSTEMS THAT CONTRIBUTE TO ECONOMIC DEVELOPMENT AND COMPLY WITH EU STANDARDS The next important objective of the Ministry of Finance of Ukraine is to ensure the development and implementation of tax and customs policies, to ensure the efficient accumulation of resources necessary for the State to perform its functions, providing the fairness and equality of the tax system, its adaptation to the norms and regulations of the European Union, absence of negative influence for doing business and promoting economic development.
Objective 2.1. Improvement of the tax system efficiency, stability and predictability
A key factor for success in improving the quality and efficiency of tax administration is the reform of the State Fiscal Service of Ukraine (SFS) by transforming it into a service body that provides assistance to business entities and citizens in taxation and is able to counteract the tax evasion effectively.
Results and achieved goals by 2017 (inclusive)
The quality and efficiency improvement of tax administration was one of the most important objectives of the Ministry of Finance of Ukraine in the last few years. Therefore, high consideration is given not only to the legislative regulation, but also to the modern IT solutions implementation that will allow to minimize the risks associated with manual interference of the information systems work.
During 2017 the following results and goals were achieved:
a Register of automatic VAT refund was launched, that allowed to minimize the risks of corruption and “manual” interference with the refunding process; the VAT risk monitoring system was launched, that gave the possibility to provide the automatic process of invoices monitoring and minimize the corruption threats;
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the control procedure was approved, including the SFS databases monitoring on the administration of taxes by the Ministry of Finance of Ukraine;
the process of tax consultations providing was launched;
a risk-oriented tax control system was reconsidered and updated;
a separate operational unit, that is responsible for implementation of the tax-related reforms, was established within the structure of the Ministry of Finance of Ukraine. The main results and key goals achieved by the Ministry of Finance of Ukraine in the field of the SFS institutional capacity reforming and improving in 2017 are: the process of the tax police liquidation was initiated and a draft law “On the Financial Investigation Service” was developed; new approaches to competitive selection at the SFS were introduced with the involvement of representatives of the Ministry of Finance of Ukraine, Business Ombudsman and experts, as well as with the use of audio and video surveillance; KPI’s for the SFS were introduced, that were developed with the public experts of the Reanimation Package of Reforms in partnership with the Research Institute of Fiscal Policy and the Institute for Tax Reforms;
4 directions in the SFS reforming were defined:
• • • •
an algorithm for the in-office audits automation was developed;
the E-Cabinet functionality was updated.
servicing of taxpayers; audit; tax debt repayment; staff relations
In connection with the improvement of cooperation on international taxation and the implementation of norms assigned in the Association Agreement with the European Union, the Ministry of Finance of Ukraine achieved the following results during the year 2017: a draft law on the approaching of excise tax rates for tobacco products in accordance to the minimum level of the EU was adopted by the Parliament; in order to balance the budget revenues in 2017, excise tax rates on alcoholic liquors were increased by 20% and the classification of alcoholic liquors was approximated to the requirements of the European Union for excise tax purposes; annual increase in excise tax rates for tobacco products was provided: in 2018 - by 29.7%, and in subsequent years - by 20% to 90 EUR per 1,000 units; statutory regulation was provided concerning the equipment of excise warehouses on the territory of which fuel is produced, processed (recycled), mixed, loaded/unloaded and stored, with flow meters and level indicators.
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Planned objectives during 2018–2021
In the medium term further steps to improve the quality and efficiency of tax administration are inseparably linked with the continued reform of the SFS in terms of standardizing the implementation of key functions and procedures, as well as further improvement of the interaction in respect of international taxation and compliance by Ukraine with the norms assigned in the Association Agreement with the European Union. In particular, Ministry of Finance of Ukraine is planning to implement key objectives during 2018: Key objectives in 2018-2021
Expected outcomes •
Continuation of the comprehensive SFS reform
• • •
Establishment of the Agency investigation of financial crimes
responsible
for
the
improvement of corporate culture in the SFS and its transformation into a service department that encourages voluntary payment of taxes; implementation of IT solutions in the work of the SFS; introduction of risk management in processes of tax audits, work with debtors; elaboration of an Action Plan for SFS reforming after approval of the Concept for reforming the system of the state bodies that implementing the state tax and customs policy
Assurance of effective fight against tax and customs offenses
Conduction of an assessment of the main components of tax administration using the Tax Administration Diagnostic Methodology (TADAT)
Improvement of the tax administration quality
Introduction of the unified form for tax reporting on personal income tax and unified social tax
Simplification of the taxation process
Harmonization of legislation with the EU norms
Implementation of the Association Agreement between Ukraine and the EU on Directives: Directive 2007/74/EC, Directive 92/83/EEC, Directive 2003/96 /EC, Thirteenth Directive 86/560/EEC, Directive 2011/64/EC , Directive 2006/112/EC
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Objective 2.2. Tax base extension
One of the key areas of the tax policy development and implementation by the Ministry of Finance of Ukraine is the work on the tax base extension, including the policies and practices of tax base erosion and counteracting the profit shifting, transfer pricing control and reviewing the conditions of avoidance of the double taxation.
Results and achieved goals by 2017 (inclusive)
Within the framework of the Strategy for the Reform of the Public Finance Management System for 2017-2020, the Ministry of Finance of Ukraine achieved the following key results and goals: a draft law on the Exit capital tax was developed, and it will stimulate the increasing investments into development of production and contribute to simplification of tax administration;
the process of BEPS Action Plan implementation was initiated;
a Roadmap for introduction of an automatic exchange of financial information for tax purposes was developed; Protocols on amendments to the agreements on avoidance of double taxation with the United Kingdom, the Kingdom of the Netherlands, Turkey, Malaysia and Cyprus were signed; the Convention on the Avoidance of Double Taxation with Malta and Luxembourg was drafted and ratified by the Verkhovna Rada of Ukraine;
an Agreement of the MLI implementation was prepared. 41
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Planned objectives during 2018–2021 During 2018-2021 it is planned to make further changes to broaden the tax base, primarily due to full implementation of the Minimum Standard of BEPS, ensuring conditions for Ukraine’s accession to the Multilateral Agreement of the competent authorities on the automatic exchange of financial information, as well as analysis of the possibilities for extending the base of property taxation using the best world practices. In particular, it is planned by the Ministry of Finance of Ukraine to implement key objectives during 2018: Key objectives in 2018-2021
Expected outcomes
Fully compliance with the Minimum Standard of BEPS
Reduction of tax frauds and application of tax base erosion practices
Development of the criteria for identifying the highincome earners and providing the SFS with the authority to access the information on their bank accounts, provided that the data is properly protected
Establishment of an effective control over the completeness and timeliness of tax payments by highincome earners
Establishment of a control system for introduction of goods into the market, including the expanded use of cash registers
Strengthen control over the commodity circulation
Signing protocols on amendments to the Conventions on the avoidance of double taxation and tax avoidance with Switzerland, Belgium, France, Austria, Germany, Spain
Extension of the list of partner countries concerning avoidance of double taxation and prevention of tax evasion
Ensuring the possibilities for Ukraine’s accession to the Multilateral Agreement of the competent authorities on the automatic exchange of financial information
Signing of the Multilateral Agreement by the Competent Authority of Ukraine. Implementation of the Single Standard of Reporting, which provides the periodic (once a year) exchange of tax information between the countries that have joined the implementation
The Ministry of Finance of Ukraine is planning to implement certain provisions of the EU Council Directives on a common system of value added tax and excise taxes for implementation the regulations of the Association Agreement with the European Union. 42
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Objective 2.3. Improvement of customs performance efficiency
Within the framework of the SFS reforming, the Ministry of Finance of Ukraine and the Government are providing a customs reform that will enable to implement a conceptually new procedure for interaction of customs offices with the entities engaged in foreign economic activities. The reform is aimed to improve the quality, ensure transparency and increase the operational efficiency of the customs offices by improving the legislation; strengthening institutional capacity according to the best European practices and EU guidelines, accelerating export and import of goods and facilitating trade procedures.
Results and achieved goals by 2017 (inclusive)
By the end of 2017 the Ministry of Finance of Ukraine has achieved the following key results and objectives: draft laws regulating customs matters were submitted to the Verkhovna Rada of Ukraine, in particular on the introduction of the institution of an authorized economic operator, the simplification of radiological and ecological control, customs and brokerage activities: • “On Amendments to the Customs Code of Ukraine (regarding certain issues of implementation of Chapter 5 of Section IV of the Association Agreement between Ukraine, on the one hand, and the European Union, European Atomic Energy Community and their Member States, on the other hand”; • “On Amendments to the Customs Code of Ukraine on the Reform of the System of Ecological and Radiological Control at Checkpoints” and “On Amendments to Certain Laws of Ukraine on the Reform of the System of Ecological and Radiological Control at Checkpoints”; • “On Amendments to the Customs Code of Ukraine Regarding the Deregulation of Certain Types of Economic Activity Controlled by the Tax Agencies”; the Procedure of information exchange between the tax agencies, other state bodies and enterprises was improved on the basis of a “single window” principle, using the electronic information system; a legal and regulatory framework was created for introduction of a single account for all the SFS customs offices, opened on behalf of the SFS, that will allow the companies to pay customs duties at any customs office on the territory of Ukraine; a Strategy for development of the risk management system regarding the customs control for the period up to 2022 and the Anti-smuggling Tobacco Strategy for the period up to 2021 were approved.
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Within the framework of implementation of the Association Agreement between Ukraine and the EU regarding the customs, the Ministry of Finance has prepared a number of draft laws. As for now, 6 draft laws are at the Verkhovna Rada of Ukraine. Adoption of the draft laws by the Verkhovna Rada of Ukraine in 2018 will create the conditions for fulfillment of the obligations under the Agreement in terms of: creation of preconditions for initiation of the procedure for Ukraine’s accession to the Convention on the simplification of formalities in trade in goods and Convention on the common transit regime; introduction of an institute of authorized economic operator in Ukraine, similar to the operating in the EU; bringing the Ukrainian legislation into compliance with the EU regulations on customs enforcement of intellectual property rights and exemption from customs duties.
Planned objectives during 2018–2021
Further customs performance improvement implies Ukraine’s accession to the European transit system (NCTS), continued harmonization of the legislation of Ukraine and the European Union, as well as implementation of measures in accordance with the Action Plan on Customs Reform. In particular, during 2018 it is planned by the Ministry of Finance of Ukraine to implement key objectives:
Key objectives in 2018-2021
Expected outcomes
Preparation of the Draft law on harmonization of the Ukrainian legislation to the EU customs legislation
Creation of favorable environment for economic activity and fulfillment of obligations under the Association Agreement with the EU
іFurther development of the electronic system of information exchange based on the “single window” principle
Reduction of the time expenditures during the exportimport operations
Preparation of the secondary legislation for full implementation of the institution of an authorized economic operator
Reduction the time and money expenditures on foreign trade by accelerating the movement of the goods between the counterparts
Preparation of the submission for consideration to the Cabinet of Ministers of Ukraine a draft Action Plan on Customs Reform in accordance with the EU guidelines, (the Customs Blueprints)Development of the risk
Comprehensive customs reform
management system in the area of customs control and customs’ IT infrastructure modernization
Automation of customs procedures and introduction of an effective system of monitoring and control at the customs offices
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4.3. STRATEGIC GOAL NO. 3. FINANCIAL SYSTEM ENSURING SUPPORT FOR MACROECONOMIC STABILITY, EFFECTIVE FINANCIAL MONITORING AND USE OF RESOURCES FOR ECONOMIC DEVELOPMENT In order to ensure the financial policy formation and implementation, the Ministry of Finance of Ukraine is responsible for providing the macroeconomic stability in terms of the financial system consistence through the maintaining the level of government budget deficit and public debt at an economically sound level, as well as by creation of conditions for the state bank proper management that will provide the effective financial intermediation and directing the resources of the banking sector for economic development purposes. Effective monitoring of financial transactions that will prevent the financial system from the money laundering, terrorist financing and spread of weapons of mass destruction, must also be provided.
Objective 3.1. Budget balance and debt security
Due to the national currency devaluation, Ukraine’s public debt for 2014-2016 has more than tripled, that affected the ability of the State to settle its debt obligations and reduced to its credit-rating downgrades and the necessity of restructuring the public debt and publicly guaranteed external debt. A foreign currency component of the public debt, as well as peak payments for the public sector debt reimbursement in 2019-2020 regarding the currency risk and the public debt refinancing risk are defined as high. The medium-term strategy for the public debt management for 2018-2020 determines public debt management objectives: increasing the share of public debt in the national currency, including by attracting foreign investors to invest in bonds in the national currency; prolonging the average maturity of government securities and ensuring the provision on evenly scheduled basis repayment of the public debt, including through active management of public debt management with a view to reducing peak pressures on the state budget and stimulating demand for government securities; attraction of long-term privileged financing by expanding cooperation with the international financial organizations, in particular the World Bank, the International Monetary Fund, the European Bank for Reconstruction and Development, the European Investment Bank and the governments of partner countries of Ukraine; development of strong relationships with investors, including through ensuring openness and publicity. One of the main objectives of the budget policy is a gradual reduction of the state budget deficit and, accordingly, reduction of the public debt in terms of gross domestic product aimed at stabilization of the public finances determined by the Coalition Agreement, the Medium-Term Plan of Government Priorities 2020, Sustainable Development Strategy “Ukraine-2020”, Strategy for the Reform of the Public Finance Management System for 2017-2020 and programs of cooperation with international financial institutions. Financial support of Ukraine from the international institutions as well as from the European Union and the United States, will have a considerable impact on the economic situation and further implementation of reforms.
45
STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Results and achieved goals by 2017 (inclusive)
ON THE BUDGET BALANCE
The state budget deficit indicator approved in the laws on the State Budget of Ukraine (as amended) amounted to 4.1% of GDP in 2015 (actual – 2.3%), 3.7% of GDP in 2016 (actual – 2.9%), 2.7% of GDP (actual – 1.6%) in 2017. On the one hand, the reduction of the relative indicator of the state budget deficit restricts the possibilities for financing the priority areas of expenditures, including those aimed at realizing reforms. On the other hand, it contributes to the public finances stabilization, in particular due to lower the rates of public debt growth and, accordingly, expenditures for its servicing. At the same time, further possibilities for reducing the level of the state budget deficit are substantially limited by the need to provide defense and security expenditures, public debt servicing and inter-budget transfers that have substantially increased in recent years. Thus, for the period from 2013 to 2017, the actual state budget expenditures, as a percentage of GDP, have increased under the functional classification of the expenditures: for defense – by 1.5%, for servicing the public debt – by 1.6% and for inter-budget transfers – by 1.5%, for public security, security sector and judicial power – by 0.4%.
ON THE DEBT SECURITY
In 2017 the Ministry of Finance of Ukraine performed the work on improving the legislation on the public debt and publicly guaranteed debt management. In order to enable active public debt management operations, to bring the state external borrowing procedures into compliance with the best international practices, and for the purpose of resolving the debt policy issues (improvement of the approval procedure for the medium-term public debt management strategy) and cooperation with the international financial institutions, the amendments in the Tax and Budget Codes of Ukraine were made. The implementation of measures for the development of the domestic bond market are continued to be provided. The Ministry of Finance of Ukraine together with the World Bank experts analyzed the results of auctions on domestic government bonds placement in the last years and changed approaches to auctions. The need to increase the volumes of issue of each instrument to the liquid capital is supposed to be achieved by the additional placement of the existing instruments, without issue of the new ones, with the same maturity. Weekly consultations with primary dealers concerning
46
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
the demand for domestic government bonds were established, which resulted in the adjustment of the schedule of domestic government bonds placement. These approaches ensure transparency and predictability of the issuer’s actions in the domestic bond market, which contributes to increasing the confidence of investors, including the foreign ones. In consultation with the Cabinet of Ministers of Ukraine, the Ministry of Finance of Ukraine involved a financial advisor on public debt management and state external borrowing. The activities were performed to ensure the full access of Ukraine to the foreign capital markets. In September 2017, for the first time after the foreign national debt restructuring in 2015, Ukraine issued the domestic government bonds for a principal amount of $3.0 billion with a maturity of 15 years at a rate of 7.375% per annum. General indicators of interest from investors in the new issue exceeded $9 billion. This issue was recognized to be the best among the countries of Central and Eastern Europe, Middle East and Africa, proving that investors are confident in Ukraine. It is an important step for effective public debt management and stabilization of Ukraine’s financial system in the future. The following measures to actively manage the public debt and ensure minimization of the risk of the public debt refinancing were taken:
the exchange and redemption of the domestic government bonds in 2015 of the first and second series with a yield of 7.75% (for the principal amount of $ 1.2 bln and $ 0.4 bln, respectively) were provided at the expense of the new issue. The risk of refinancing the government debt over the next two years was reduced and the way for future transactions in order to further equalize the schedule of Ukraine’s foreign national debt repayment was opened. This also contributed to stimulating the investors’ demand for domestic government bonds in 2017; in October 2017 a public debt transaction (reprofiling) was carried out by the exchange of domestic government bonds in the amount of UAH 219.6 bln held by the National Bank of Ukraine for the new domestic government bonds with fixed interest rates and linking of the yield with the inflation rate. As a result of reprofiling, redemption of the domestic government bonds portfolio of the National Bank of Ukraine will be evenly distributed about 12 billion hryvnias annually, that will allow to distribute the load on the state budget for 30 years. In this case, simultaneous presence of domestic government bonds with fixed and floating rates ensures the diversification of interest rate risk. Cooperation with foreign investors and leading international rating agencies was intensified by ensuring the transparency of the public debt management process and disclosure of relevant information. During 2017 sovereign credit ratings of Ukraine were raised or confirmed by the rating agencies (Moody’s raised the level from “Caa3” to “Caa2” and the forecast from stable to positive, Standard 47
STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
& Poor’s confirmed the “B-” rating and the stable forecast; Fitch Ratings confirmed the “B-” rating and stable forecast). In 2017 the information and analytical system “Public Debt Management” was supported, including improvements in the forecasting and reporting tools, improved public debt management software for protection from attacks connected with vulnerabilities of systemic software against external intrusions on servers, functional failure of the “Public Debt Management” system, databases distortion and destruction. During 2017 the Ministry of Finance of Ukraine prepared documents on the provision of state guarantees and approval of the involvement of state-owned enterprises, 50% of which were owned by the state, loans, loans, guarantees and guarantees. According to the results of 2017, the state guarantees were provided for a credit of NNEGC “Energoatom” to finance the investment project “Construction of a Central Spent Fuel Storage Facility for the VVER NPP of Ukraine” in the amount of almost UAH 7.0 billion ($250.0 million), and loans raised in the framework of the Program for the Defense Capacity and Security of Ukraine in the amount of UAH 1.1 billion.
The public debt and publicly guaranteed debt were maintained within its limits at the end of 2017. Against the background of improvement in the dynamics of economic and social development of Ukraine and continued economic growth in 2017 initiated in the previous year, as well as reduction of the state budget deficit from 2.9% of GDP in 2016 to 1.6% of GDP in 2017, the relationship of the public debt of Ukraine to GDP also significantly improved – from 69.2% at the end of 2016 to 61.5% at the end of 2017, and together with the publicly guaranteed debt – from 80.9% to 71.8%. 48
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Planned objectives during 2018–2021
ON THE BUDGET BALANCE
Under the conditions of low provisions for the expenditure needs for all major state functions, further fiscal consolidation capacity is within the scope of sectoral reforms aimed at reducing the share and role of the State or further revision of expenditure capabilities between the authorities and budgets of different levels. The above-said fact makes it complicated to reduce the share of GDP reallocation through the budget revenues, which should be done only in connection with the appropriate optimization of the budget expenditure. In the medium term the state budget deficit is expected to reach 2.4% of GDP in 2018, 2.2% of GDP in 2019, 2.0% of GDP in 2020, and 2.0% of GDP in 2021.
ON THE DEBT SECURITY
The main objectives of the public and publicly guaranteed debt management in the medium term are: further improvement of legislation concerning public and publicly guaranteed debt management in accordance with the best international practices;
implementation of measures for development of the domestic government bond market;
active engagement of investors and international rating agencies;
implementation of measures to minimize the risk of refinancing the public debt and avoid peak loads on the state budget related to the public debt payments;
enhanced cooperation with the international financial organizations.
Ukraine’s sovereign credit ratings increases to the “BBB” level by 2021 according to the Standard & Poor’s rating agency, with the planned “B +” target at the end of 2018.
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Key objectives in 2018-2021
Expected outcomes
Improvement of the legislation concerning the public and publicly guaranteed debt management in accordance with the best international practices
Establishment of the stringent restrictions on the state guarantees provision. Improvement of the risk-based monitoring mechanisms related to the government guarantees, including the introduction of a risk-based commissioning fee and improving the assessment of the borrower’s credit quality in issuing such guarantees. Approval of the Medium-Term Strategy for State Debt Management in an updated format
Implementation of measures of the domestic market of government securities development
Development of the primary dealers institution and their rotation. Development of the base of investors in the government bonds. Increase of the government domestic borrowings share and government domestic debt
Cooperation with investors and international rating agencies
Assurance of full access to foreign capital markets. Increase of Ukraine’s rating as for liabilities in foreign currency according to the scale of the rating agency Standard and Poor’s to the level of BBB by 2021
Measures to minimize the risk of the public debt refinancing and to avoid the peak loads on the state budget related to the public debt payments
Aligning
Expansion of the base of investors in securities
Placement of a wide range of domestic government bonds according to maturities in the volumes that will ensure financing of the state budget deficit
Integration of liquidity and debt management functions for better coordination of the strategies for issuance of debt instruments and investment of idle funds
Determination of an effective mechanism for placing temporarily debt instruments of the single treasury account and currency accounts of the Government and making such placements
50
of
the
public
debt
payment
schedule
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Objective 3.2. Effective and transparent cooperation with the international financial institutions (IFIs)
One of the main objectives of the Ministry of Finance of Ukraine is the implementation of measures to ensure fulfillment of the financial and other obligations of the state within the framework of Ukraine’s membership in international financial institutions (IFIs). The Ministry of Finance coordinates the work related to the initiation, preparation and implementation of projects of economic and social development of Ukraine supported by the foreign countries, banks and international financial organizations, monitoring the implementation of these projects, and providing the methodological support for this work.
Results and achieved goals by 2017 (inclusive)
In 2017, there were 33 joint IFIs projects, in particular projects with the European Atomic Energy Community with total amount 2.903 billion U.S. dollars and with the Credit Institution for Reconstruction (KfW) in the amount of 4.712 billion euros. To increase transparency and accountability, the publication of information on Ukraine’s economic and social development projects supported by the IFIs has been launched on the official website of the Ministry of Finance of Ukraine. During 2017, the International Finance Corporation (IFC) was also able to finance projects in the national currency, it was achieved an increase of 22% in the World Bank current project portfolio and more than doubled in the European Investment Bank portfolio.
Planned objectives during 2018–2021
The priority objective of the Ministry of Finance of Ukraine during 2018-2021 is to intensify the activities in the framework of joint projects with the IFIs, foreign states, banks, in particular by implementing the measures that will increase the volume of the sample of loans and will strengthen the control over their effective and targeted use. As of September 30, 2018, the disbursed amount regarding projects of economic and social development is: Currency
Loan amount, mln
Used funds, mln
% of the sample
US dollar
2 403
591
24,6%
2. Joint development projects with the European Bank for Reconstruction and Development
Euro
1 577
756
47,9%
3. Joint development projects with the European Investment Bank
Euro
3 217,54
501
15,6%
4. Joint development projects with the Reconstruction Credit Institute (KfW)
Euro
207,5
10
4,9%
5. Joint projects with the Nordic Environmental Finance Corporation (NEFCO)
Euro
30
-
0,0%
Group of projects
1. Joint development projects with the World Bank
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
The increasing of the current level of the disbursed amount under the projects of economic and social development of Ukraine supported by the IFI is inextricably linked with the reorganization of the work of the Ministry of Finance of Ukraine regarding structural transformations and optimization of the approaches to fulfill the key functions and procedures. During the 2018-202, the following key objectives are defined: Key objectives in 2018-2021
Expected outcomes
Operational testing of the module “Register of economic and social projects development of Ukraine supported by IFIs”
Transparency and access to the information on financing and use of credit funds under the projects supported by the IFIs
Elaboration of the action plans of cooperation of the Ministry of Finance of Ukraine with every IFI and establishment of problem-solving mechanisms
Enhancing the interaction with the IFIs, improving the communication between the IFIs, principal performers and other key stakeholders
Establishing a system for monitoring the implementation of the projects supported by the IFIs
Bringing the disbursed amount of projects with the IFIs to the planned indicators according to the system of effective control and supervision of the status of project implementation
Staff capacity development for the principal performers and beneficiaries to increase the effective cooperation with IFIs
Strengthening the institutional capacity of principal performers and beneficiaries within the projects supported by the IFIs through the training and learning in the partnerships with the IFIs
Increasing the share of the projects in the national currency financing by the IFIs
Increasing the ability to finance projects by the local budgets and reduce the vulnerability to exchange rate shocks
Legislative support for direct foreign borrowing by local governments
Increasing the share of investment projects implemented by the local self-government bodies
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Objective 3.3. Competitiveness and efficiency of the state-owned banks
Within the framework of the state financial policy formation and implementation the Ministry of Finance of Ukraine ensures development and efficiency of the financial services market, public sector banks and other financial institutions. In accordance with the Government-supported Principles of Strategic Reforming of the State Banking Sector, development of state-owned banks is based upon four main directions: implementation of strategies for state-owned banks for recovery of their activities as stable, profitable institutions operating on a commercial basis;
improvement of the effectiveness of the governance model of public sector banks;
development and implementation of approaches for work with non-performing loans in order to reduce the pressure on banks’ balances, maximize their residual value; introduction of plans for the State to withdraw from the capital of banks and to ensure increase in their value.
Results and achieved goals by 2017 (inclusive)
For the purpose of financial stability of the banking system, it was decided to nationalize the largest bank of Ukraine – PJSC CB “PRIVATBANK”. As a result, in early 2017, the share of the public sector banks (PJSC CB “PRIVATBANK”, JSC “Oschadbank”, JSC “Ukreximbank”, JSCB “Ukrgasbank”) in the banking system assets reached 55% versus 27% in 2015. During 2016-2017 the Ministry of Finance of Ukraine achieved the following results in terms of development of the state-owned banks: the Principles of Strategic Reforming of the State-owned Banking Sector were developed and supported by the Government; a draft law on the corporate governance improvement in the state-owned banks was developed jointly with the IMF, World Bank, EBRD and IFC, approved by the Government and submitted for consideration to the Verkhovna Rada of Ukraine; capitalization of the state-owned banks at the level of the NBU regulatory requirements was ensured; the draft law “On Financial Restructuring” was prepared, and then supported by the Verkhovna Rada of Ukraine; this draft law is an effective instrument to deal with the troubled assets; Memorandum of Understanding between the Government of Ukraine, PJSC “State Savings Bank of Ukraine” and the European Bank for Reconstruction and Development was signed in respect to support the “Oshchadbank” reforming and preparation for privatization; Memorandum between the Ministry of Finance of Ukraine, JSB “Ukrgasbank” and the International Finance Corporation (IFC) was signed to attract the investments, to provide the consulting services for JSB “Ukrgasbank” development and to increase its investment attractiveness.
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Planned objectives during 2018–2021
The main objectives of the Ministry of Finance of Ukraine in the medium term are to ensure the effective management and performance of the state-owned banks in accordance with the updated Principles of Strategic Reforming of the State-owned Banking Sector approved by the Government in February 2018 by means of: introduction of corporate governance in accordance with international practices, in particular with the OECD principles; introduction of performance indicators system to monitor the strategies implementation of the state-owned banks;
determination of measures aimed at effective dealing with troubled assets;
reduction of the State’s share in the banking sector during three years and complete withdrawal of the State at least from one of the banks. Implementation of these objectives will increase profitability and allow the return on equity of state-owned banks to exceed 12% in the period up to 2022, and also the reduction in the share of the State in the banking sector from 55% in 2017 to 24% in 2022. Key objectives in 2018-2021
Expected outcomes
Implementation of the effective corporate governance in the state-owned banks
Establishment of the independent and professional supervisory boards of state-owned banks; Approval the contracts of the supervisory boards members based on the performance indicators
Establishment of a specialized structural unit in the Ministry of Finance of Ukraine responsible for monitoring and control of the state-owned banks’ activities
Consolidation and increasing the efficiency of management of state shares and control of all stateowned banks in the Ministry of Finance of Ukraine
Approval of the individual strategies for the state-owned banks
Optimization and increasing the efficiency of operating models of banks according to the individual strategies
Creation of mechanisms for managing performing loans of the state-owned banks
Reduction of the bad debts share in the state-owned banks
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the
non-
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Objective 3.4. Formation and implementation of the policy on anti-money laundering and combating the financing of terrorism
In accordance with the Association Agreement between Ukraine and the European Union, European Atomic Energy Community and their Member States, Ukraine must ensure implementation of the relevant international standards, in particular those of the Financial Action Task Force (FATF) and the standards equivalent to those adopted by the Union. On May 20, 2015, for the purpose of harmonizing the EU legislation with the International AML/ CFT Standards and proliferation of weapons of mass destruction approved by FATF in February 2012, the European Parliament and the Council of the European Union adopted the Directive (EU) “On the Prevention of the Use of the Financial System for the Purpose of Money Laundering and Terrorist Financing” and approved the EU Regulation “On Information Accompanying Transfers of Funds”. Most of the provisions of the above-mentioned documents have been implemented in the Ukrainian legislation, in particular, in the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of the Proceeds of Crime, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction”, that was developed on the basis of the FATF recommendations. According to the results of the fifth round of the technical compliance assessment of Ukrainian legislation conducted in 2017, Ukraine received positive ratings from the Committee of Experts of the Council of Europe on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). The national legislation fully complies with 12 FATF Recommendations, mostly complies with 20 thereof, partially complies with 7 thereof and one Recommendation is not applicable in Ukraine. By the level of efficiency, according to the established ratings, Ukraine received the rating “significant” for two results, “moderate” for eight results and low rating against one indicator.
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Results and achieved goals by 2017 (inclusive)
In order to identify the basic strategic objectives of the national system of prevention and counteraction to the money laundering, terrorist financing and financing of the proliferation of weapons of mass destruction, the Cabinet of Ministers of Ukraine approved the Strategy for Development of the System of Prevention and Counteraction to Money Laundering, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction until 2020. The Strategy was developed by the Ministry of Finance of Ukraine and ratified the appropriate action plan for 2017-2019 for the Strategy implementation. The Ministry of Finance of Ukraine participated in a meeting with the representatives of the monitoring mission in Strasbourg, French Republic (October 2017) and in the 55th Plenary Meeting of MONEYVAL (December 2017), whereby the meeting the Mutual Evaluation Report of Ukraine within the framework of the 5th round of mutual evaluations were reviewed and approved. By approving the Mutual Evaluation Report of Ukraine, MONEYVAL Committee confirmed that Ukraine was a reliable jurisdiction in AML/CFT issues, which did not require special control measures by the MONEYVAL Committee and FATF. In order to implement the provisions of the Fourth Directive (EU) 2015/849 and Regulation (EU) 2015/847, the draft law “On Amendments to Certain Legislative Acts of Ukraine regarding the Prevention and Counteraction to the Money Laundering, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction” was prepared in order to implement the legal and institutional actions outlined in the Memorandum of Cooperation between Ukraine and the IMF. The Ministry of Finance of Ukraine completed preparation of this draft law in 2017 in close cooperation with the NBU, State Financial Monitoring Service of Ukraine, foreign experts and the public.
Planned objectives during 2018–2021
Key objectives in 2018-2021
Expected outcomes
Preparation of the final version and submission to the Cabinet of Ministers of Ukraine the draft law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine regarding the Prevention and Counteraction to the Money Laundering, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction”
Improvement and clarification of certain statutory regulations on prevention and counteraction to money laundering, as well as ensuring implementation of the provisions of new international standards regarding anti-money laundering and combating the financing of terrorism
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C HAPTER 5
STRATEGIC GOALS, OBJECTIVES AND OUTCOME INDICATORS
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Strategic goal 1. Improvement of the effectiveness of allocation and use of the budget funds Description of objective
Description of the outcome indicator to be achieved
Unit measure
Accounting period
Planning period
2016
2017
2018
2019
indicator
«D»
-
-
-
«В»
-
persons
-
-
100
100
100
100
%
-
-
1
2,5
4
6
persons
-
-
100
100
100
100
Share of local budgets, which are formed in the program-oriented format
%
-
15
33
100
100
100
Objective 1.4. Verification of government social payments
Number of recommendations given based upon the verification results regarding identification of misrepresentation
thous. units
1578,0
25820,4
Objective 1.5. Development of state internal financial control
Number of internal auditors, who participated in advanced training
persons
350
180
125
100
100
100
Number of implemented pilot internal control projects
units
1
-
-
2
2
1
Revision of internal control functioning in the ministries, other central executive authorities
units
-
-
1
-
-
-
Objective 1.1. Implementation of medium-term budget planning
Evaluation of the results of public finance management against РІ-16 indicator “Medium term expenditure budgeting” in accordance with PEFA methodology Headcount of key spending units, who completed training on the medium term budget planning
Objective 1.2. Development of program-oriented method in the budget process
Share of the state budget funds, for which a review of expenditures was carried out, by accrued method Headcount of key spending units, who completed training on the programoriented method
2020 2021
19600,0 18900,0 10100,0 5000,0
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STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
Description of objective
Objective 1.6. Accounting and audit reforming
Objective 1.7. Improvement of inter-budget relations
Objective 1.8. Enhancement of the budget transparency
60
Description of the outcome indicator to be achieved
Unit measure
Number of introduced national accounting provisions (standards) in the public sector
Accounting period
Planning period
2016
2017
2018
2019
2020 2021
units
9
10
1
1
1
-
Evaluation of results of reforming the accounting and financial reporting system in the public sector against the РІ-29.3 indicators “Reporting Standards” in accordance with PEFA methodology
indicator
-
-
-
-
-
«А»
Number of adopted accounting-related instruments of legislation
units
2
4
9
-
-
-
Number of adopted audit-related instruments of legislation
units
-
1
12
-
-
-
Number of local budgets that have relations with the state budget
units
792
998
1288
1400
1500
1600
Share of transfers in the local budget revenues
%
53,4
54,3
55,8
53
51
49
Share of local self-government bodies using the medium term budget planning
%
-
-
-
-
100
100
Ukraine’s scoring in the Open Budget Index, not less than
scores
46
54
54
57
57
59
Publication of information on implementation of the state and local budgets in the IAS “Transparent Budget”
units
-
-
10
30
12
10
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Description of objective
Objective 1.9. Enhancement of the institutional capacity of the Ministry of Finance of Ukraine
Objective 1.10. SFS’ databases monitoring and control
Objective 1.12. Enhancement of the expenditure planning transparency for higher education
Description of the outcome indicator to be achieved
Unit measure
Accounting period
Planning period
2016
2017
2018
2019
units
0
0
6
6
6
6
Number of civil servants, in whose respect the procedure of appointment for reform specialist positions was initiated
persons
-
2
50
47
-
-
Number of civil servants of the MoF administration engaged in the advance training
persons
223
316
150
150
150
150
Number of upgraded systems of information and analytical support for budget process
units
0
0
1
1
1
1
Number of created forms for work with SFS databases and information resources
units
0
3
6
9
12
15
Number of indicators of SFS databases and information resources, included into the created forms
units
0
16
28
39
48
55
Effective allocation of budget expenditure for higher education
bln UAH
12.9
19.3
17.7
19.2
20.5
21.9
Number of directorates in the structure of MoF administration, that started functioning
2020 2021
61
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Strategic goal 2. Simple, effective, fair tax and customs systems that contribute to economic development and comply with EU standards Description of objective
Objective 2.1. Improvement of the tax system efficiency, stability and predictability
Description of the outcome indicator to be achieved
Unit measure
Level of GDP redistribution through the consolidated budget revenues, in % of GDP, +/- 1 % GDP in 2019–2021
62
Planning period
2016
2017
2018
2019
%
32,8
34,1
34,9
34
34
34
Level of tax revenues of the consolidated budget, in % of GDP, +/- 1 % GDP in 2019–2021
%
27,3
27,8
29,5
29
29
29
Tax debt reduction relating to the debt amount at the beginning of the current period and net of the debt, which occurred in the current year
%
11,7*
10
10
10
10
Position in the Doing Business rating against the indicator “Taxation”, not lower than
position
43
39
35
30
30
Share of tax returns submitted using the electronic services of the SFS
%
743
74
75
76
77
Share of actual volume of VAT refund in the volume claimed for recovery
%
93
93
93
93
93
Percentage of discharged obligations regarding taxation in the total scope of obligations determined for the respective year in the area in question
%
90
67
-
100
-
100
-
-
15
15
15
15
Number of summary tax consultations given by the Ministry of Finance of Ukraine *
Accounting period
84
2020 2021
The figures for 2017 represent the achieved values of the Key Performance Indicators confirmed based upon a special commission of the Minister of Finance of Ukraine No. 11000-08/1117
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Description of objective
Objective 2.3. Improvement of customs performance efficiency
Description of the outcome indicator to be achieved
Unit measure
Accounting period 2016
Planning period
2017
2018
2019
2020 2021
Average time of customs clearance in the import regime
minutes
94
70
65
60
55
Average time of customs clearance in the export regime
minutes
44
25
20
17
15
Average time of customs clearance in the transit regime
minutes
18
15
10
8
5
Share of customs infrastructure facilities that will be built and reconstructed at the state boundary
%
15
20
40
50
Technical and logistical support for the customs clearance units with the technical means of customs control, including the checkpoints and uniform for officials
%
15
20
40
50
Strategic goal 3. Financial system ensuring support for macroeconomic stability, effective financial monitoring and use of resources for economic development Description of objective
Objective 3.1. Budget balance and debt security
Description of the outcome indicator to be achieved
Unit measure
Accounting period 2016
2017
Planning period 2018
2019
2020 2021
State budget deficit, % of GDP, not higher than
%
2,9
1,6*
2,4
2,2
2
2
State debt level, % of GDP, not higher than**
%
69,2
61,5
60
56**
54**
53**
*
Actual volume of Nominal GDP is 2982.9 bln UAH according to the State Statistics Service.
**
The calculations were based on the deficit indicators for 2019-2020, not exceeding 2% of GDP. Establishing a state budget deficit at the highest level and financing it mainly through the state borrowing will lead to increase the ratio of government debt to GDP and, as a result, exceeded established performance indicators (benchmarks). In addition, the calculations of government debt do not take into account the possibility of making the state borrowings for other purposes, except for financing the state budget. In accordance with the Medium-Term Strategy for Public Debt Management for 2018-2020, approved by the Cabinet of Ministers of Ukraine on August 22, 2018, the ratio of government debt to GDP at the end 2019 is expected at a level not exceeding 52%, and by the end of 2020 - 49%. Accordingly, this indicator at the end of 2021 is expected at a level not exceeding 46%.
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Description of objective
Description of the outcome indicator to be achieved
Objective 3.3. Competitiveness and efficiency of the state-owned banks
*
64
Planning period
2017
2018
2019
indicator
В -
В -
B
B+
ВВ+
ВВВ
The ratio of the actual disbursement of funds for the IFIs projects to the planned indicators specified in the Annex 9 to the State Budget for the relevant year
%
42
47
50
60
75
90
Planned state budgetary incomes of loans attracted by state to the special fund, from states, banks and IFIs for the implementation of projects (in accordance with Annex 9 to the State Budget for the relevant year)
bln UAH
23
24
Return on equity of the banking sector
%
-
-
18
State budget revenues from sale of shares of the state-owned banks
bln UAH
15 16,1 17 21
<0
-
-
2020 2021
85
%
55
53
50
43
42
25
Increased the combating money laundering and terrorism financing in Ukraine by implementation of the recommendations given by the Committee of the Council of Europe MONEYVAL based upon the results of the 5th round of Ukraine evaluation, not lower than
%
-
-
20
50
70
90
Improvement of the national legislation on prevention of money laundering and antiterrorist protection, particularly by implementation of the relevant EU legislation on antimoney laundering and terrorism financing
draft law
-
-
1
-
-
-
Share of the stateowned banks in the banking system assets Objective 3.4. Formation and implementation of the policy on antimoney laundering and combating the financing of terrorism
Accounting period 2016
Rating of foreign exchange liabilities according to the Standard and Poor’s rating scale* Objective 3.2. Effective and transparent cooperation with the international financial institutions
Unit measure
Ratings can only be assigned if structural reforms are subsequently implemented and the certain levels of indicators (in stitutional, economic, external, fiscal and monetary) are achieved in accordance with the methodology of the rating agency Standard and Poor’s.
C HAPTER 6
ACTIVITIES AIMED AT IMPLEMENTATION OF THE OBJECTIVES AND ACHIEVEMENT OF THE STRATEGIC GOALS
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Strategic goal 1. Improvement of the effectiveness of allocation and us of the budget funds №
Objective / Action
Deadline
Indicator of achievement
Responsible executor
Objective 1.1. Implementation of medium-term budget planning 1.1.1
Analysis of the opportunities of implementing a budget margin and its application for the planning reserve creation
2018
1.1.2
Amendments to the regulatory acts concerning introduction of the medium term budget planning and development of the program-oriented method
1.1.3
Executive summary on the possible models of using the budget margin
State Budget Department
2018–2019
Regulatory acts
State Budget Department
Introduction of the budget declaration as a main strategic document of fiscal policy through development of the draft State Budget of Ukraine for the next year on the basis of respective indicators of the medium term budget declaration, with explanation of any deviations
2018–2021
Draft State Budget
State Budget Department
1.1.4
Improvement of the procedure of allocation of limit expenditure volumes in the midterm
Within 3 months’ term after making amendments in the Budget Code of Ukraine concerning the medium term budget planning
Regulatory acts
State Budget Department
1.1.5
Software implementation, including the medium term budget planning
2018
Terms of References Software
Department of Information Technologies
1.1.6
Increase of the capacity for policy planning and budget analysis by holding trainings on the policy planning and budget analysis and provision of continuous methodological support
2018–2021
Percent of employees, who completed training
State Budget Department
1.1.7
Development of proposals on optimization of the number of key spending units by qualifying only the ministries and central executive authorities with a special status as key spending units in the system of central executive authorities
2018
Regulatory acts
State Budget Department
1.1.8
Development of measures to stimulate more effective management of state assets, primarily in respect of stateowned companies and property managed by the key spending units
2018
Regulatory acts
Fiscal Risk Department
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1.1.9
Strengthening the quality monitoring of assessing the impact of adoption of draft laws and regulatory acts on the budget
2018
All the draft laws and regulatory acts are subject to assessment concerning their impact on the budget in accordance with the approved methodology
Government and Public Relations Department
1.1.10
Determination of the procedure of the Minister of Finance performing during consideration of the draft laws and regulatory acts at the meetings of the Cabinet of Ministers of Ukraine in case of violation of requirements to assessment of the impact of such acts on the budget or in case of lacking appropriate compensation mechanisms for balancing the budget expenditures and revenues
2018
Amendments were made in the Regulations of the Cabinet of Ministers of Ukraine
Legal Department
1.1.11
Increase of the capacity of the subjects of legislative initiative and subjects of rulemaking during assessment of impact on the budget from legislative and other regulatory acts by holding trainings on assessment of the impact on the budget and provision of continuous methodological support
2018
Percent of employees, who completed training
State Budget Department
1.1.12
Introduction of medium term budget planning at the local level
Approval by the local state administrations and executive authorities of local councils of the local budget forecasts for two budget periods following the planning period
Local Budgets Department
1.1.13
Increase of the institutional capacity of local self-government bodies concerning the medium term budget planning, analysis of budget and tax policy and assessment of effectiveness of budget programs by holding trainings and provision of continuous methodological support
Percent of employees, who completed training
Local Budgets Department
after formation of local budgets for 2019
2018â&#x20AC;&#x201C;2021
Objective 1.2. Development of program-oriented method in the budget process 1.2.1
68
Organization and participation in assessment of expenditures efficiency and expediency (expenditure review)
2018â&#x20AC;&#x201C;2021
Proposals relating to the expenditure review organization
Departments within the competence
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Representatives of the MoF that are participated in the working groups for review of expenditure and participated in formation of reports (recommendations) submitted to the Cabinet of Ministers of Ukraine 1.2.2
Optimization of budget programs, directions of using the budget funds and their resulting indicators under KVK 350 “Ministry of Finance of Ukraine”
2018
Budget requests
Financial and Economic, Accounting and Financial Reporting Department and other Departments within the competence
1.2.3
Updating the methodology of monitoring and assessment of the budget program effectiveness
2018
Order
State Budget Department
1.2.4
Assessment of effectiveness of budget programs according to the updated methodology
1.2.5
Review of the methodology for monitoring and assessment of effectiveness of budget programs of local budgets and establishment of the requirement on publication of assessment results
I 2019–2021
2019
nformation on the results of assessment
Departments within the competence
Order
Local Budgets Department
Objective 1.3. Effective fiscal risk management 1.3.1
*
Preparation and submission for consideration to the Cabinet of Ministers of Ukraine of a draft resolution of the Cabinet of Ministers of Ukraine on the establishment of a procedure for preparing a report on fiscal risks and their potential impact on the state budget in the planning budget period
2018–2019*
Resolution of the Cabinet of Ministers of Ukraine
Fiscal Risk Department
Within the 2 months’ period after making amendments in the Budget Code of Ukraine concerning the medium term budget planning
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1.3.2
Preparation and submission for consideration to the Cabinet of Ministers of Ukraine of a draft resolution on amendments in the Regulations on the Cabinet of Ministers of Ukraine in terms of fiscal risk management
2018
Resolution of the Cabinet of Ministers of Ukraine
Fiscal Risk Department
1.3.3
Introduction of information and analytical system for processing the fiscal risk data
2019
Information and analytical system
Fiscal Risk Department
1.3.4
Preparation of information on the fiscal risks and their potential impact on the state budget in 2019
2018
Information included into the budget documentation
Fiscal Risk Department
1.3.5
Comprehensive assessment of fiscal risks and determination of their impact on the state budget
2019–2021
Extended report on fiscal risks
Fiscal Risk Department
Improvement of exchange of information and interdepartmental coordination on the fiscal risks with the bodies concerned
2020
Regulatory acts
Fiscal Risk Department
Elaboration and submission for consideration to the Cabinet of Ministers of Ukraine of the draft expanded methodology for fiscal risk assessment, that will contain the measures to minimize fiscal risks and particularly include the risks connected with: • macroeconomic situation • state-owned enterprises and state property management • state guarantees • extra-budgetary funds • local borrowing • public-private partnership
2018
Regulatory act
Fiscal Risk Department
1.3.6
1.3.7
Objective 1.4. Verification of government social payments
70
1.4.1
Improvement of statutory regulation of the process of the government payments verification
2018–2021
Regulatory acts
Database monitoring and payments verification Department
1.4.2
Establishment of the informational exchange between the Ministry of Finance and authorities for the purpose of the government payments verification
2018–2021
Joint orders
Database monitoring and payments verification Department
1.4.3
Operational testing of the Information and Analytical Platform for electronic verification and monitoring of state payments
2018
Information and analytical platform
Database monitoring and payments verification Department
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Objective 1.5. Development of state internal financial control 1.5.1
Holding of training activities for internal auditors and improvement of their qualifications
2018–2021
Training activities
State Internal Financial Control Harmonization Department
1.5.2
Implementation of the pilot internal control projects aimed at strengthening the responsibility of managers for development of the institution and formation of an efficient structure of internal control on the basis of the selected ministries, risk management
2019–2021
Pilot objects
State Internal Financial Control Harmonization Department
1.5.3
Assessment (review) of the state of functioning of internal control systems in ministries and other central executive authorities
2018
Information and analytical materials
State Internal Financial Control Harmonization Department
1.5.4
External quality assessments of the internal audit in ministries, other central executive authorities, regional and Kyiv city state administrations
2018–2021
Recommendations
State Internal Financial Control Harmonization Department
Objective 1.6. Accounting and audit reforming 1.6.1
Development and approval of regulatory acts on the national accounting standards in the public sector, as well as ensuring compliance of classification of revenues and expenditures in the national standards with the budget classification of revenues and expenditures
2018–2021
Regulatory acts
Budget Revenue Forecasting and Accounting Methodology Department
1.6.2
Cooperation with the International Federation of Accountants on the translation of international standards and the corresponding updating of national accounting standards in the public sector
2018–2021
Implementation of the international standards
Budget Revenue Forecasting and Accounting Methodology Department
1.6.3
Updating the Strategy for modernization of the accounting reform system in the public sector and determining further steps to transfer to accounting by the accrual method for budget transactions
2018
Updated strategy was approved
Budget Revenue Forecasting and Accounting Methodology Department
1.6.4
Development of a program for training specialists of the public sector entities on the application of national accounting standards in the public sector
2018
Training, workshop program
Budget Revenue Forecasting and Accounting Methodology Department
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1.6.5
Assurance of transition of the spending units and state specialized funds to preparation of financial statements in accordance with national accounting standards in the public sector using the full set of national accounting standards in the public sector and the new Plan of Accounts in the public sector
2018
Consolidation of reports on the operations of budget implementation, key spending units and state specialized funds was provided
Budget Revenue Forecasting and Accounting Methodology Department
1.6.6
Creation of an integrated information and analytical system for information exchange and consolidation of financial statements using databases and information systems
2018
An integrated information and analytical system was created
Budget Revenue Forecasting and Accounting Methodology Department
1.6.7
Implementation of the Directive 2006/43/EU concerning: • determination of conditions and procedure of auditor access to provide the audit activities; • creation of a unified register of auditors and audit firms; • strengthening the quality control of audit services; • creation of the system for public supervision over activities of auditors and audit firms
2018
Regulatory acts
Budget Revenue Forecasting and Accounting Methodology Department
1.6.8
Implementation of the Directive 2013/34/ EU concerning: • establishing the uniform requirements on the preparation and submission of the balance sheet and profit and loss statement according to the EU law; • establishing the requirements to the contents of the notes to financial statements; • establishing the requirements to the management report; • establishing uniform requirements on preparation of consolidated financial statements in accordance with the EU law regulations; • introduction of obligatory preparation, submission and publication of the report on payments for the benefit of the State for certain categories of companies
2018
Regulatory acts
Budget Revenue Forecasting and Accounting Methodology Department
Objective 1.7. Improvement of inter-budget relations
72
1.7.1
Gradual transition to the relations between the state budget and all local budgets to the extent of completion of the process of unification of territorial communities
1.7.2
Preparation of proposals for making amendments in the Budget Code of Ukraine in terms of improving the mechanism of equalization of local budgets’ fiscal capacity
2018–2021
2018
Number of local budgets related with the state budget
Local Budgets Department
Draft law
Local Budgets Department
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
1.7.3
Development of the methodological recommendations on the preparation of local budgets in the mediumterm perspective, consistent with the methodology of medium-term state budget planning
1.7.4
Expansion of the tax base on the revenues credited to local budgets
1.7.5
Provision of regular consultations between the central executive authorities and local state bodies on the fiscal policy objectives, delegated powers, and their financial support in the short and medium terms
2018–2019
2019 2018–2021
Order
Local Budgets Department
Draft law
Tax Policy Department
Regular consultations are held
Local Budgets Department
Objective 1.8. Enhancement of the budget transparency 1.8.1
Development and operational testing of the Integrated IAS “Transparent Budget”
2018–2021
Information and analytical system
IT Department
1.8.2
Development of general recommendations for local selfgovernment bodies on determination of mechanisms for participation of citizens in the budget process, including the “budget of participation”
2018–2019
Order
Local Budgets Department
1.8.3
Preparation and publication of the Budget for Citizens
2018–2021
Publication on the official website
Department of Communications, Organizational and Analytical work of the State Budget Department, Departments within the competence
1.8.4
Development of general recommendations for local selfgovernment bodies on the preparation and approval of budget regulations
2018–2019
Order
Local Budgets Department
1.8.5
Clarification of the state financial control bodies performance regarding the local budgets, review of control powers of local financial bodies (internal control and audit), unification of approaches to audit of local budgets by the bodies of state financial control and independent external auditors
2018
Regulatory acts
Local Budgets Department
1.8.6
Publication of a short description of the model administration and the main approaches to forecasting the budget revenues used
2018
Publication on the official website
Department for Budget Revenue Forecasting and Accounting Methodology
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Objective 1.9. Enhancement of the institutional capacity of the Ministry of Finance of Ukraine
74
1.9.1
Preparation of the Draft Order of the Ministry of Finance of Ukraine on the beginning of performing by the Directorates of the functions and powers entrusted to them
2018
Orders
HR and Organizational Development Department
1.9.2
Organization and holding of competitions for the reform experts positions
2018
Competition results
HR and Organizational Development Department
1.9.3
Organization of trainings for increasing the level of professional competence for employees of the Ministry of Finance of Ukraine
2018–2021
Scheduled plant of trainings
HR and Organizational Development Department
1.9.4
Providing activities on preparation for the HR strategy development of the Ministry of Finance of Ukraine
2018
HR-strategy concept
HR and Organizational Development Department
1.9.5
Preparation of budget requests under KVN 350 “Ministry of Finance of Ukraine”
2018–2021
Budget request
Financial and Economic, Accounting and Financial Reporting Department
1.9.6
Development of budget program passports, preparation and publication of reports on their implementation under KVK 350 “Ministry of Finance of Ukraine”
2018–2021
Budget program passports and reports on their execution
Financial and Economic, Accounting and Financial Reporting Department
1.9.7
Conduct of audit and development of recommendations on increasing the institutional capacity of the Ministry of Finance of Ukraine
2021
Audit report
Anti-corruption and internal audit department
1.9.8
Creation and putting into operation of new software modules AIS “State Budget” and IAS “Local budgets”
2018–2020
oftware modules
Department of Information Technologies
1.9.9
Development of medium-term strategic plans and operational plans of the Ministry, their implementation monitoring
2018–2021
Orders Reports
Directorate of Strategic Planning and European Integration
1.9.10
Development of the Regulations on project activity, standards of project documentation and methodological recommendation
2018
Order Methodological Recommendations Project portfolio of the MoF
Directorate of Strategic Planning and European Integration
1.9.11
Development and approval of the strategic plan for IT systems development (with a list of requirements, deadlines and responsible executives) to support the public finance reform, including components: • centralization of the functions of developing, purchasing, implementing and integrating IT systems for budget planning and implementation, assessment and
2018
Strategic plan of IT system development
Department of Information Technologies
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
•
•
• •
monitoring of fiscal risks, accounting, internal audit, liquidity forecasting, as well as development and implementation of interfaces for interaction with tax administration, customs, public procurement systems and public investment management; development of an integrated information system to support the process of preparation and monitoring of budget execution process at all levels; creation of an integrated database of the Ministry of Economic Development and Trade (e-procurement system), Ministry of Finance (integral web portal of budget funds using) and the Treasury; improvement of the informational exchange between the Ministry of Finance, SFS and State Treasury; automation of tax administration processes in accordance with the Government’s priorities
1.9.12
Implementation of the e-document management system
2018
The system was implemented
Document Management and Compliance Monitoring Department
1.9.13
Introduction of a methodological framework (security policies), as well as software and technical solutions for protection of the information
2018
Methodological framework was implemented
Information Security Department
Objective 1.10. SFS’ databases monitoring and control 1.10.1
ПAnalysis and summary of reporting indicators and SFS data structures, defining the structure and formats of SFS data used in tax administration.
2019
Reports
Database monitoring and payments verification Department
1.10.2
Determination of the procedures of analysis and monitoring of the reporting indicators of the SFS for the purpose of creating a monitoring system for the SFS reporting indicators
2020
Monitoring system
Database monitoring and payments verification Department
1.10.3
Determination of types of potential threats of interference with the operation of the SFS databases and information resources and effective methods of their prevention, construction of a system of detection and prevention of threats of external and internal interference with the operation of the SFS databases and information resources
2021
Information system
Database monitoring and payments verification Department
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Objective 1.12. Enhancement of the expenditure planning transparency for higher education 1.12.1
Assessment and analysis of the effectiveness of expenditure for staff training by the higher education institutions
2018
Report
Humanitarian Budget Expenditures Department
1.12.2
Participation in preparation of proposals and calculations concerning introduction of allocation of state budget expenditures for higher education based upon a formula
2018
Resolution of the Cabinet of Ministers of Ukraine
Humanitarian Budget Expenditures Department
Strategic goal 2. Simple, effective, fair tax and customs systems that contribute to economic development and comply with eu standards â&#x201E;&#x2013;
Objective / Action
Deadline
Indicator of achievement
Responsible executor
Objective 2.1. Improvement of the tax system efficiency, stability and predictability
76
2.1.1
Development and submission for consideration to the Cabinet of Ministers of Ukraine of the draft law on amendments to the Tax Code of Ukraine relating to bringing the wine products classification into compliance with the European classification
2018
Draft law
Tax Policy Department
2.1.2
Development and submission for consideration to the Cabinet of Ministers of Ukraine of the draft law on amendments to the Tax Code of Ukraine relating to resolution of the existing problematic issues and improvement of excise tax administration
2018
Draft law
Tax Policy Department
2.1.3
Development and submission for consideration to the Cabinet of Ministers of Ukraine of the mediumterm development strategy for the tax system
2018
Resolution of the Cabinet of Ministers of Ukraine
Tax Policy Department
2.1.4
Accession of Ukraine to the multilateral convention on the implementation of measures relating to taxation for the purpose of counteracting the erosion of the tax base and profit shifting (MLI), that will allow implementation of steps 6 and 14 of the BEPS Action Plan in the Ukrainian legislation
2018
Draft order of the President of Ukraine
Tax Policy Department
2.1.5
Drafting and submission for consideration to the Cabinet of Ministers of Ukraine of a draft law on amendments to the Tax Code of Ukraine relating to control over transfer pricing (implementation of the BEPS Action Plan, namely steps 8-10 and 13)
2018
Draft law
Tax Policy Department
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
2.1.6
Development and submission to the Cabinet of Ministers of Ukraine of a draft law on amendments to the Tax Code of Ukraine relating to criteria for identification of persons with the highincomes and granting of powers to the SFS to access information on the bank accounts of these persons subject to independent protection of such data
2018
2.1.7
Conduct of negotiations and signing the Protocols on amendments to the Double Taxation Conventions with Germany, France, Sweden, India, Kazakhstan, Montenegro, the United Arab Emirates, Moldova, Denmark, for the purpose of prevention of tax avoidance for foreign investments and preventing tax evasion in relation to taxes on income and capital
2018–2021
2.1.8
Drafting and submission for consideration to the Cabinet of Ministers of Ukraine of a draft law on the extension of powers of local state bodies in terms of administration and control of payment of local taxes and duties
2.1.9
Drafting and submission for consideration to the Cabinet of Ministers of Ukraine of a draft act providing for reorganization of the State Fiscal Service of Ukraine for the purpose of performing within the framework of one legal entity
2.1.10
Development of an action plan for implementation of the Concept for reforming the system of the bodies implementing the state tax and customs policy in the medium-term as part of the reform of the tax service
2.1.11
Maintenance in the Verkhovna Rada of Ukraine of the draft laws of Ukraine “On Amendments to Certain Laws of Ukraine Regarding the Introduction of a Unified Contribution for Compulsory State Social Insurance” (Reg. No. 7034) and “On Amendments to the Tax Code Ukraine Regarding Introduction of a Single Account for Payment of Taxes and Duties, a Unified Contribution for Compulsory State Social Insurance” (Reg. No. 7035)
Draft law
Tax Policy Department
Draft ordinance of the Cabinet of Ministers of Ukraine
Tax Policy Department
2018
Draft law
Tax Policy Department
2018
Regulatory acts of the Cabinet of Ministers of Ukraine
Tax Policy Department
Action Plan was approved
Tax Policy Department
The laws of Ukraine were adopted
Budget Revenue Forecasting and Accounting Methodology Department Tax Policy Department
Within a month after approval of the Concept for reforming the system of bodies implementing the state tax and customs policy 2018–2019
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78
2.1.12
Development and submission to the Cabinet of Ministers of Ukraine of a draft resolution of the Cabinet of Ministers of Ukraine on the procedure for opening/closing, functioning of single accounts and exchange of information on the cashflow accounts, interaction of information systems of the central executive authority implementing the state tax and customs policy, and the central executive authority implementing the state policy on fiscal service of budget funds
2018â&#x20AC;&#x201C;2019
2.1.13
Development and submission to the Cabinet of Ministers of Ukraine of a draft law on submission of a single report on a unified contribution for compulsory state social insurance and personal income tax
2.1.14
Resolution of the Cabinet of Ministers of Ukraine
Budget Revenue Forecasting and Accounting Methodology Department Tax Policy Department
2018
Draft law
Tax Policy Department
Establishment of a special state agency for the financial crimes prevention
2018
Draft law
Tax Policy Department
2.1.15
Implementation of electronic tax audits (e-audit) with the appropriate software
2018
Electronic tax audits (e-audits) are conducting
Database monitoring and payments verification Department
2.1.16
Creation of a system for measuring the level of client satisfaction of the SFS service quality
2018
Assessment system Publication of annual reports on the results of assessment on the website of the MoF
Database monitoring and payments verification Department
2.1.17
Assessment of the main components of tax administration using the Tax Administration Diagnostic Methodology (TADAT)
2018
Report and recommendations
Tax Policy Department
2.1.18
Conduction of the inspection (psychological selection, analyzing the staff skills and abilities, psychometric and polygraph detector testing, etc.) of the employees of the SFS and its local bodies, including the employees of the units that perform control functions, publication of the results of the inspection on the official webportal of the SFS
2018
Conduct of inspections Publication of results on the official website of the SFS
HR and Organizational Development Department
2.1.19
Implementation of the Council Directive 2007/74/EU on the exemption from value added tax and excise duties on the products imported by persons traveling from the third countries
2018
Draft law
Customs Policy Department
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
2.1.20
Implementation of certain provisions of Council Directive 92/83/EU as for bringing the concept of “intermediate products” into compliance with the EU requirements (Association Council defines the timetable for implementation)
2019
Draft law
Tax Policy Department
2.1.21
Implementation of certain provisions of Council Directive 2003/96/EU in terms of bringing the national legislation concerning the excise taxes on energy products and electricity into compliance with the requirements of the Directive (gradually, as may be necessary for Ukraine in future)
2021
Draft law
Tax Policy Department
2.1.22
Implementation of certain provisions of the Thirteenth Council Directive 86/560/EU on bringing into compliance with the EU requirements of the arrangements for value added tax refunds to taxable persons not incorporated in the territory of the EU (Association Council defines the timetable for implementation)
2019
Draft law
Tax Policy Department
2.1.23
Implementation of certain provisions of Council Directive 92/83/ EU of 19.10.1992 on the harmonization of the structures of excise duties on alcohol and alcoholic beverages
2019
Draft law
Tax Policy Department
2.1.24
Implementation of certain provisions of Council Directive 2011/64/ EU of June 21, 2011 on the structure and rates of excise duty on tobacco products (Association Council defines the timetable for implementation)
2019
Draft law
Tax Policy Department
2.1.25
Implementation of certain provisions of Council Directive 2006/112/EC of 28.11.2006 on a common system of value added tax
2019
Draft law (if necessary) based upon the results of analysis of national law compliance with regulations of the EU acts
Tax Policy Department
Objective 2.2. Tax base extension 2.2.1
Working on introducing the model of tax on the withdrawn capital after approval by the National Council of Reforms (depending on the results of consideration of the draft law by the National Council of Reforms)
2018
Proposals
Tax Policy Department
2.2.2
Provision of conditions for Ukraine’s accession to the Multilateral Agreement of the competent authorities relating the automatic exchange of financial information
2019
Multilateral agreements was signed by the Competent Authority of Ukraine
Tax Policy Department
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2.2.3
Development of the criteria for identifying high-income individuals and empowering the SFS to access information on their bank accounts, provided that these data are properly protected
2018
Draft law
Tax Policy Department
2.2.4
Analysis of opportunities for expanding the property tax base using the best practices
2019
Proposals were prepared on the expansion of the property taxation base
Tax Policy Department
2.2.5
Establishment of a control system for introduction of goods into circulation, including the expanded use of cash registers
2018
The system of control over goods turnover is functioning
Database monitoring and payments verification Department Tax Policy Department
Objective 2.3. Improvement of customs performance efficiency 2.3.1
80
Draft laws, draft regulatory acts of the Cabinet of Ministers of Ukraine, regulatory acts of the MoF
Customs Policy Department
2018
Draft ordinance of the Cabinet of Ministers of Ukraine
Customs Policy Department
Drafting and submission for consideration to the Cabinet of Ministers of Ukraine of a draft resolution on further development of the electronic information exchange system on the basis of the “single window” principle
2018
Draft resolution of the Cabinet of Ministers of Ukraine
Customs Policy Department
2.3.4
Preparation of by-laws necessary for the full implementation of the institution of an authorized economic operator
2018–2019
Draft regulatory acts of the Cabinet of Ministers of Ukraine
Customs Policy Department
2.3.5
Development of the risk management system concerning customs control and modernization of the automated customs system
2018
Automated system
Customs Policy Department
Execution of the customs-related assignments defined by the action plan on implementation of the Association Agreement between Ukraine, on the one hand, and the European Union, European Atomic Energy Community and their Member States, on the other hand
2018–2021
Implementation of the Regulations: Regulation (EU) No. 450/2008 (cancelled and replaced by the Regulation (EU) No. 952/2013), Council Regulation (EU) No. 1891/2004 (cancelled and replaced by Commission Implementing Regulation (EU) No. 1352/2013), EC Council Regulation (EU) No. 1186/2009, EC Council Regulation (EU) No. 1383/2003 (cancelled and replaced by Regulation (EU) No. 608/2013
2018
2.3.2
Drafting and submission for consideration to the Cabinet of Ministers of Ukraine of a draft act on the approval of the Customs Reform Action Plan in accordance with the EU guidelines, such as the Customs Blueprints, the SAFE Framework of Standards to Secure and Facilitate Global Trade of the WCO and the Trade Facilitation Agreement
2.3.3
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Strategic goal 3. Financial system ensuring support for macroeconomic stability, effective financial monitoring and use of resources for economic development №
Objective / Action
Deadline
Indicator of achievement
Responsible executor
Objective 3.1. Budget balance and debt security 3.1.1
Expansion of the base of investors in securities by regular placement of a wide range of domestic government bonds according to maturities in the volumes that will ensure financing of the state budget deficit
2018–2021
Auctions
Debt Policy Department
3.1.2
Cooperation with leading rating agencies in order to achieve the rating at the level of the BBB by the end of 2021
2018–2021
Ratings
Debt Policy Department
3.1.3
Ensuring the elaboration of a balanced draft state budget for the next year, which is based upon the target deficit indicators determined by the MediumTerm Budget Declaration
2018–2021
Law
State Budget Department
3.1.4
Strengthening of capacity in forecasting the budget indicators by training on the peculiarities of using advanced budget forecasting tools
2018
Percent of employees, who completed training
Budget Revenue Forecasting and Accounting Methodology Department
3.1.5
Improvement of macroeconomic forecasting tools and construction of new models for forecasting of key macroeconomic indicators
2018–2021
Forecasts of the key macroeconomic indicators
Strategic Planning and European Integration Directorate
3.1.6
Preparation of informational and analytical materials and forecasts of socio-economic development
2018–2021
Executive summaries
Strategic Planning and European Integration Directorate
3.1.7
Amendments to the Budget Code of Ukraine regarding: • restrictions on the issuance of new guarantees (for example, 5 percent of revenues of the general fund of the state budget); • limitation of the guaranteed amount of the obligation (e.g. up to 100 percent of the obligation to repay the principal amount of the credit or 80 percent of the obligation to repay the principal amount and servicing the credit); • determining the responsibility of central executive authorities for monitoring the risks arising from state guarantees
2018
Draft law on amendments to the Budget Code of Ukraine
Debt Policy Department
3.1.8
Introduction of a commission fee for issue of guarantees, the amount of which is calculated on the basis of risk assessment, and improvement of assessment of the borrower’s credit rating when issuing such guarantees
2018
Recovery of a commission fee was ensured for issue of state guarantees
Debt Policy Department
81
STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018–2 0 2 1
3.1.9
Improvement of mechanisms for monitoring the risks associated with state guarantees, including by their distribution and involvement by the guarantor of the banks - financial agents
2018
Budget expenditure for implementation of guarantee events was reduced
Debt Policy Department
3.1.10
Approval of the Medium-Term Strategy for State Debt Management in an updated format
2018
Regulatory act
Debt Policy Department
3.1.11
Analysis of data on the actual flow of funds on a single treasury account for the last 3 years to determine the regularities and establish exchange of information with the key spending units relating to the sector specifics of cash flows
2018
Analytical Report
Liquidity Management Department
3.1.12
Development of the methodology of forecasting the flow of funds and implementation of relevant analytical tools
2018
Order
Liquidity Management Department
3.1.13
Increase of the forecasting period of daily flow of funds on the single treasury account from one month to three months, in the next stage to six months, with a gradual increase in the quality of forecasts
2018
Forecasts of flow of funds on the STA
Liquidity Management Department
3.1.14
Analysis of the deviation of the forecast cash flow indicators (within the period of up to three months) from the actual indicators, establishment of the causes of deviations in order to improve the forecasting accuracy
2018
Analytical Report
Liquidity Management Department
3.1.15
Assurance of the operation of the liquidity management unit and development of an effective capacity to forecast the flow of funds
2018
Analytical capacity of the liquidity management unit of the MoF was increased
Liquidity Management Department
3.1.16
Determination of an effective mechanism for placing temporarily idle funds of the single treasury account and currency accounts of the Government and making such placements
2018
Operations on placing temporarily idle funds of the STA and currency accounts of the Government are carried out for a period of up to one month
Liquidity Management Department
3.1.17
Coordination on the time of significant revenues and expenditures of the state budget by amending the regulatory acts concerning revision of the payment deadlines for wages and social payments, as well as making payments to the budgets by the taxpayers
2018
Regulatory acts
Liquidity Management Department
3.1.18
Integration of liquidity and debt management functions for better coordination of the strategies for issuance of debt instruments and investment of idle funds
2018
Plans for issuance of short-term debt instruments were reconciled with the forecasts of cash flows on the STA and the Government’s currency accounts
Liquidity Management Department
Objective 3.2. Effective and transparent cooperation with the international financial institutions (IFIs) 3.2.1
82
Operational testing of the module “Register of economic and social projects development of Ukraine sup¬ported by IFIs”
2020
Register
Department of International Financial Projects
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
Objective 3.3. Competitiveness and efficiency of the state-owned banks 3.3.1
Development and submission for consideration to the Cabinet of Ministers of Ukraine of the draft laws required to improve the efficiency of work with non-performing loans
2018
Draft laws
Financial Policy Department
3.3.2
Development of a mechanism for management of non-performing loans in the state-owned banks
2018
Mechanism
Financial Policy Department
3.3.3
Implementation of corporate governance with functioning independent supervisory boards and committees in Oshchadbank and Ukreximbank in accordance with the principles of the OECD (based upon 13 key principles) with the involvement of independent directors after making appropriate amendments in the legislation
2018
The Supervisory Board was officially appointed at full strength for each of the banks in accordance with the principles of the OECD (based upon 13 key principles)
Financial Policy Department
3.3.4
Signing of contracts with clearly established KPIs with independent supervisory boards of the state-owned banks
2018
Contracts are concluded
Financial Policy Department
3.3.5
Signing of Memoranda of Understanding between the operating unit of the Ministry of Finance of Ukraine and each of the state-owned banks
2018
Memorandum
Financial Policy Department
3.3.6
Approval of strategies for the stateowned banks by the Government, general meetings of shareholders and/ or supervisory boards: • Approval by the Government of two strategies for Oschadbank and Ukreximbank, and by the general meeting of shareholders one strategy for PrivatBank; • Approval by the supervisory boards of four strategies for stateowned banks, namely: Privatbank, Oschadbank, Ukrgasbank and Ukreximbank
2018
Strategies are developed
Financial Policy Department
3.3.7
Establishment of the operating structural unit in the Ministry of Finance of Ukraine responsible for monitoring and control of the activities of the state-owned banks sector
2018
Operating unit was established
Financial Policy Department
Objective 3.4. Formation and implementation of the policy on anti-money laundering and combating the financing of terrorism 3.4.1
Drafting and submission to the Cabinet of Ministers of Ukraine of the Draft Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Regarding the Prevention and Counteraction to the Money Laundering, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction” (Implementation of provisions of the Fourth Directive (EU) 2015/849 and provisions of the Regulation (EU) 2015/847)
2018
Draft law
Tax Policy Department
83
C HAPTER 7
BUDGET PROGRAMS AIMED AT FINANCIAL SUPPORT FOR ACHIEVEMENT OF THE STRATEGIC GOALS, IMPLEMENTATION OF THE OBJECTIVES AND ACTIVITIES
S T R A T E G I C P L A N O F T H E M I N I S T R Y O F F I N ANCE OF U K R A I N E 2018–2021
KPKVK*
*
Name of budget program
Responsible executor
Numbers of strategic objectives
2016 (actual)
2017 2018 (actual) (approved)
3501010
Administration and management of finances
Administration of the Ministry of Finance of Ukraine
1, 2, 3
153 536,1
361 857,0
524 678,0
3501100
Scientific and methodological support relating to production and use of precious and semi-precious stones and meeting the production and sociocultural requirements for precious metals and precious stones
Administration of the Ministry of Finance of Ukraine
1
6 468,5
8 870,3
9 992,2
3501140
Contributions to international organizations
Administration of the Ministry of Finance of Ukraine
1
316 223,2
645 130,6
3501480
Construction and functioning of the information and analytical platform for verification and other measures related to its implementation
Administration of the Ministry of Finance of Ukraine
1
3 230,5
19 882,3
19 905,2
3504010
Administration and management of treasury servicing
State Treasury Service of Ukraine
1
891 263,8
1 602 742,7
2 107 489,3
3504030
Compensation for damage caused to a citizen by unlawful actions of the bodies of inquiry, pretrial investigation, prosecutor’s office and courts, compensation for a citizen of the value of confiscated and ownerless property collected to the state revenue, compensation for damage caused to an individual or legal person by unlawful decisions, actions or omissions of state authorities, their officials and officers
State Treasury Service of Ukraine
1
18 094,7
27 694,7
33 651,9
3504040
Arrangements to enforce court decisions guaranteed by the state
State Treasury Service of Ukraine
1
144 757,5
499 999,8
500 000,0
Сode of program classification of expenditure and crediting
85
STRATEGIC PLAN O F T H E M I N I S T R Y O F F I N A N C E O F UKRAINE 2018â&#x20AC;&#x201C;2 0 2 1
KPKVK*
Name of budget program
Responsible executor
Numbers of strategic objectives
2016 (actual)
2017 2018 (actual) (approved)
3507010
Administration and management of fiscal policy
State Fiscal Service of Ukraine
2
5 377 494,2
6 485 410,8
10 967 110,3
3507020
Applied researches and developments related to fiscal policy
State Fiscal Service of Ukraine
2
8 388,6
12 601,6
14 164,4
3507050
Staff training concerning fiscal policy by higher educational institutions of the 3d and 4th levels of accreditation
State Fiscal Service of Ukraine
2
123 357,5
150 639,4
166 300,2
3509010
Administration and management of financial monitoring
State Financial Monitoring Service of Ukraine
3
27 011,3
139 900,0
66 605,3
TOTAL:
*
86
ĐĄode of program classification of expenditure and crediting
7 463 355,3
9 961 629,2 14 409 896,8
Implemented by:
Kyiv, 2018