Review of financial legislation amendments 2015
« BackPublic finance plays a strategic role in functioning of financial sector and economy at all, developing of regions and supporting of entrepreneurship. In its turn these branches reflect a basis of economic and social development of Ukraine. Efficiency of public finance management is of a great role for providing stability of budget system as well as general financial safety and economic growth.
According to Doing Business 2015 World Bank official rate for ease of doing business Ukraine ranks as 96-th among 189 world countries and as 108-th for tax payment indicator. The aforesaid statistics means an average investment attractiveness of Ukraine, competitiveness of Ukrainian goods and services in the world market. Although a part of the business is in «shadow».
Serious changes are to be made in general and primarily on legislation related to finance and providing of liberal procedures on business doing for the purpose of improving the aforesaid statistics.
Tax and administrative reforms are the first step for improving the statistics. So, January 01, 2015 On amendments to Tax Code of Ukraine and some regulations of Ukraine on tax reform dated 28.12.2014 No.71-VIII (hereinafter referred to as Law No.71-VIII) Law of Ukraine took effect. This Law covers improving of conditions for business doing in Ukraine with simultaneous raise of Ukraine in international ratings as well as increase of efficiency for economy resources.
This Law provided a lot of amendments and innovations of tax legislation. In particular the Law allowed quantity reduction of taxes and dues from 22 to 9.
Cabinet of Ministers of Ukraine shows a decisive move. Activity for execution of programs of collaboration with International Monetary Fund and other international finance organizations for the purpose of stabilization of national economy 2015-2016 and creation of favourable macroeconomic environment, effective budget and tax policy performance, observance the strict financial discipline, increasing transparency and rationality of budget process, is made.
The public government headed for providing in 2016 economic recovery, formation the basis for principal restructuring of economy as innovative model by means of creation of attractive investment climate, proper conditions for development of small and medium-sized entrepreneurship, stimulation of national business in creation of competitive goods and services and their introduction into international markets, making consistent public humanitarian policy.
On amendments to Law of Ukraine On public budget of Ukraine for 2015 dated 02.03.2015 No.217-VIII that trigged implementation of decentralized allocation of budget funds is worth paying attention to.
As for financial monitoring Verkhovna Rada adopted On prevention and combating money (laundering) and terrorism financing as well as mass destruction weapons spread Law of Ukraine No.1702-VII in the second reading and in whole, that took effect February 6, 2015 (hereinafter referred to as No.1702 Law). On prevention and combating money (laundering) or terrorism financing Law of Ukraine dated November 28, 2002 No.249-IV becomes invalid after No.1702 Law takes effect.No.1702 Law is intended for providing implementation of new international standards for combating money laundering and terrorism financing and it is adopted for fulfilment of arrangements with International Monetary Fund and with a glance to offers of Financial Action Task Force (FATF). No.1702 Law has improved national legislation for financing monitoring integrally.
Analysis of No.1702 Law demonstrate that the document provides a number of innovations in functioning of financial monitoring system both within the state as in collaboration with international organizations combating «dirty» money laundering.
Such changes substantially protect financial transactions both within the state and when paying to foreign partners.
Amendments of the legislation related to banking systems are also worth noting.
So, National Bank of Ukraine approved amendments to Provision on taking steps of National Bank of Ukraine concerning breach of banking legislation.
In particular the amendments provide that National Bank of Ukraine takes steps concerning breaching of banking legislation, legislation on finance monitoring within 6 month upon the breach found, but not later than:
- 3 years as of the day of breach of requirements for financial monitoring legislation;
- 1 year as of the day of other breaches.
National Bank of Ukraine has a right to take steps in connection with using of foreign sanctions within a period of their action starting as of the day information on using of foreign sanctions is published (released to public).
Meeting of Council of National Bank of Ukraine was held February 26, 2015according to results of which the decision with recommendation for Board of National Bank of Ukraine to prepare amendments and detailing to Main principles of monetary policy for 2015 was taken.
According to On National Bank of Ukraine Law macroeconomic indicators calculated by Cabinet of Ministers of Ukraine are used when elaborating Main principles of monetary policy.
In line with provisions of the aforesaid law, the predicted indicators of Main principles of monetary policy for 2015 arise from 1 scenario of the updated Forecast of economic and social development of Ukraine for 2015 of Cabinet of Ministers of Ukraine. Now this scenario in whole meets the estimated indicators on which new Program of extended fund facility (hereinafter – EFF) is based on.
Provisions of Memorandum of economic and financial policy, provisions of Technical memorandum of understanding cover strands of implementation of monetary and exchange rate policy within the framework of EFF program and necessity of observance the quantity criteria of efficiency is provided. Precise and timely execution of obligations in the field of monetary policy is a guarantee of a successful review of the program and obtaining next IMF tranches.
Amendments also affected public investment. In particular, On amendments to Budget Code of Ukraine on public investment projects Law of Ukraine dated 07.04.2015 No.288-VIII.
This Law determines definitions of «public investment project» and «public (local) capital investments».
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