Verkhovna Rada Committee for Environmental Policy, Environmental Management and Mitigation of Consequences of the Chornobyl Disaster eyes reports of Counting Chamber of Ukraine as to results of audit of efficiency of formation and use of funds from State Environmental Protection Fund
14 April 2015, 17:41
The Counting Chamber pointed to imperfection of the legislation to ensure stable financing of environment protection sector and pointed to the necessity for its further improvement and bringing in line with the legislation and policies of the European Union.
The major negative attributes of the legislation in opinion of the Counting Chamber of Ukraine are:
— absence of comprehensive legal and organizational system of formation of the State Environmental Protection Fund;
— inconsistency of effective legislation in this sector (in particular, the Law “On environment protection” and the Budget Code of Ukraine);
— complicated procedure of planning of measures on environment protection and their financing;
— annual non-use of accumulated funds, etc.
To tackle the said problems, the Counting Chamber of Ukraine has offered to introduce amendments into the Law of Ukraine “On environment protection” and the Budget Code of Ukraine, and also to envision establishment of the State Environment Protection Fund as an element of the state budget in the Law of Ukraine “On state budget for 2015.”
According to the Committee, the Laws I “On introduction of amendments into Budget Code of Ukraine as to reformation of inter-budgetary relations;” No. 72-VIII “On introduction of amendments into Tax Code of Ukraine as to improvement of the tax control over transfer pricing;” and No. 71-VIII “On introduction of amendments into Tax Code of Ukraine and some legislative acts of Ukraine as to tax reform” in fact liquidated the State and local environment protection funds as special funds mainly replenished at the expense of revenues obtained from environment tax.
The Law of Ukraine No. 79-VIII decreased the percent of deduction of revenues obtained from environment tax to the state budget from 65% to 20%, and raised it to local budgets from 35% to 80%. At that starting 2015, the funds from the payment of the environment tax are accrued not into the special funds of respective budgets, but into general funds (in 2014, the revenues from payments of environment tax made up UAH 3,106.7 million, 2.3 times more than in 2010).
The sources of formation of special funds of state (30%) and local (70%) budgets are only the funds withdrawn for damage caused by violation of the Law on environment protection as a result of economic and other types of activity (revenues from such fines in 2014 made up UAH 91.8 million).
Therefore, the financing of environment protection measures got more complicated than it was mentioned as a result of the audit of the Counting Chamber of Ukraine conducted basing on analysis prior to enactment of the said Laws (No. 71—VIII, No. 72—VIII, No. 79—VIII).
Participants of the meeting also discussed that “today State and local environment protection funds are in fact liquidated and the environment tax lost its main goal — the use of funds from pollution fees in measures on environment protection.” According to the Environmental and Natural Resources Ministry, as a result of abovementioned amendments into the legislation, the economic mechanism of environment protection envisioned by the Law of Ukraine “On environment protection” was in fact ruined.
Taking in account results of the audit conducted by the Counting Chamber of Ukraine, and also the information of the Environmental and Natural Resources Ministry, the Committee decided to recommend that the Cabinet of Ministers submit the draft law “On introduction of amendments into Budget Code of Ukraine, Tax Code of Ukraine as to legislative support to functioning of state and local environment protection funds as special funds within the state and local budgets and as to resumption of channeling of environment tax funds for the said special state and local environment protection funds and their further use only within environment protection measures.”
Besides, the Environmental and Natural Resources Ministry of Ukraine is recommended publish the list of environment protection and resource saving measures planned for implementation at the expense of funds of the State Environment Protection Fund.