At the Committee Meeting, Mykola Azarov, its chairman, noted that macro-indicators underpinning the Draft Budget are similar to those approved by the Resolution of the Cabinet of Ministers of Ukraine issued on 27 July 2007, and namely: Nominal GDP: 889.4 billion Hryvnias, GDP percentage growth on the previous year : 106.8%; Consumer Price Index: 109.6% (December/December previous year); Hryvnia Average Annual Exchange Rate: 4.95-5.25 (Hryvnias per 1 US Dollar); Labour Remuneration payments: 290.0 billion Hryvnias, Balance of Payments in the red ink column: 7.5 billion Hryvnias.
These indicators will be specified based on the 2007 economic activity outcome, with taking into account the Government's steps towards balancing the socio-economic parameters of the country development as envisaged in its Action Plan.
M. Azarov underlined, that the total amount or revenue in the State Budget 2008 show an increase of 8.8 billion Hryvnias, Estimated Revenues of the State Budget General fund have grown by 2.8 billion Hryvnias, the amount to be obtained by the State Budget Special Fund has been increased by nearly 6 billion Hryvnias. Therefore, in 2008 the State Budget Revenues increase on the 2007 budget will be 36.9% higher than calculated earlier.
It was stressed at the meeting, that the growth of Budget revenues does not stem from an improved estimate of economical advance in the coming year. Since the macro-economic calculation base has not increased, there are no grounds for total negation of non-existence of macro-disbalances in the forecast for economic advance in 2008.
It was also mentioned that the above increases in the Budget indicators will be achieved due to a higher (by 24.2%) level of re-distribution of the GDP through the State Budget, which is evidence of a growing fiscal pressure on the economy.
Changing the system of Tax Legislation of Ukraine through the Law on the State Budget requires a special attention and urgent settlement, in the opinion of the People's Deputies, since included in the Bill are provisions directly changing tax rates, tax collection mechanism, administration of dues and taxes, and amending the taxation laws. This is a violation of the Tax Legislation general conceptual provision, laid down in Clause 1 of the Law 'On Taxation System'.
The Committee members called for removal of all tax clauses from the text of this Bill, and inclusion thereof in an independent legislative document on amendments in the Laws of Ukraine concerning taxation. This document should be considered and elaborated together with the Bill on the State Budget of Ukraine 2008, or together with amendments to the State Budget 2008, announced in the beginning of the next year.
The Committee members also mentioned at the Meeting that the total amount allocated towards clearing off the State's commitments on depreciated monetary savings makes around 20 billion Hryvnias, or nearly 15 per cent of the whole sum fixed in the Law 'On the State Guarantees for Recovery of Ukrainian Citizens' Savings' (132 billion Hryvnias). At the same time, 'together with the plans for returning the deposits in the Saving Bank of the USSR', excluded from the Bill is the clause, providing for the indexation reflecting the inflation rate'. In addition, returning the depreciated deposits in the former Saving Bank of the USSR to Ukrainian citizens in the amount of 20 billion Hryvnias will 'lead to disbalanced consumption structure and inflation spiral'.
The Committee also called for considering increases in the authorized capital stock of State Banks, by adding 500 million Hryvnias to 'Oshchadbank Ukrainy' (Ukrainian Saving Bank), and 500 million Hryvnias to 'Ukreximbank'. The inclusion of expenditures towards replenishment of Authorised Capital stocks of said banks will allow to increase their economic value and improve their stance in the Ukrainian banking market, as well as will have a positive effect on the higher funding of the priority sectors of economy.
These, together with other proposals, were forwarded to the Budget Committee.