The Ministry of Finance of Ukraine has made an important step towards amalgamated hromadas in improving administration of local taxes and fees and extending the rights of local self-government bodies.

The department has developed amendments to the Tax Code of Ukraine aimed at improving the administration of local taxes and fees, resolving certain issues that arise when they are introduced and implemented, as well as improving provision of information to local self-government bodies on the amount of charges and payments of local taxes and fees, as reported by the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme).

Yanina Kazyuk, financial decentralisation coordinator, and Viktor Ventsel, financial monitoring expert of the Central Reform Office, informed about the main changes proposed by the Ministry of Finance to the Tax Code.

1. The deadline for making decisions on establishment of local taxes and fees is set for 15 July. The currently valid provision for the establishment of local taxes and fees within the period up to 1 July (pp. 12.3.3 of the current Code) is being changed. The Code is supplemented by the norm, which abolishes the mandatory annual adoption of decisions on the establishment of local taxes and fees.

2. Controlling bodies, by the 10th day of the month following the last calendar day of the fiscal period, provide local self-government bodies with information on the sums of accrued and paid local taxes and fees and the amount of tax debt on the respective territories.

3. Among other things, it should be noted that changes to the Code are proposed to introduce a unified form of information on the rates and advantages on local taxes and fees for submission to the regulatory authorities. A single norm is introduced for all local taxes and fees regarding the need to submit information to the controlling body on the rates and tax advantages for the payment of local taxes and fees within ten days since the date of decision-making.

4. It is also possible to positively evaluate the innovation, establishing that in case of location or registration of tax entity on the territory of administrative-territorial units that are part of an amalgamated hromada, the tax declaration is submitted to the relevant controlling authority in accordance with the location of the administrative centre of the AH.

5. In order to improve the mechanism for land payment collection, the Code is supplemented by the article, specifying the rates of land tax for land plots located within the settlements, which normative monetary assessment has not been carried out. 

The experts note that the changes, proposed by the Ministry of Finance of Ukraine, will contribute to improving the mechanisms of introduction and administration of local taxes and fees and establishing closer cooperation between controlling bodies and local self-government bodies.

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