The Law of Ukraine

On the State Budget of Ukraine for 2007

Date of entry into force:
January 1, 2007

The present Law approved the State Budget of Ukraine for 2007.

The State Budget of Ukraine shall consist of the General Fund and the Special Fund. Each of them shall have its own sources of revenues and expenditures. The deficit of the General Fund and the Special Fund shall be determined separately.

Therefore:
1) Revenues of the State Budget of Ukraine for 2007 were established in the amount of UAH 157,287,046,000.00, including:
  • revenues of the General Fund of the State Budget of Ukraine in the amount of UAH 125,443,819,300.00;
  • revenues of the Special Fund of the State Budget of Ukraine in the amount of UAH 31,843,226,700.00.
2) Expenditures of the State Budget of Ukraine for 2007 were established in the amount of UAH 174,631,522,200.00, including:
  • expenditures of the General Fund of the State Budget of Ukraine in the amount of UAH 142,768,163,000.00;
  • expenditures of the Special Fund of the State Budget of Ukraine in the amount of UAH 31,863,359,200.00.

The marginal size of the deficit of the State Budget of Ukraine for 2007 was established in the amount of UAH 15,715,729,000.00, including the marginal size of the deficit of the General Fund of the State Budget of Ukraine in the amount of UAH 14,412,501,000.00 and the marginal size of the deficit of the Special Fund of the State Budget of Ukraine in the amount of UAH 1,303,228,000.00).

Provisions of the present Law shall envisage that:
1)  revenues of the General Fund of the State Budget of Ukraine for 2007 shall include:
  • value-added tax (except for tax arrears regarding value-added tax of the National Joint Stock Company “Naftogaz Ukrayiny” that shall constitute a source for forming the Special Fund of the State Budget of Ukraine in the relevant areas specified in the present Law);
  • corporate profit tax (except for corporate profit tax of enterprises that are in communal ownership and also tax arrears regarding corporate profit tax of the National Joint Stock Company “Naftogaz Ukrayiny” that shall constitute a source for forming the Special Fund of the State Budget of Ukraine in the relevant areas specified in the present Law);
  • the fee for special utilization of water;
  • the fee for special utilization of forest resources of state importance;
  • payments for the utilization of deposits of national importance;
  • 25.45 percent of the fee for prospecting and exploration works carried out at the expense of the State Budget of Ukraine;
  • excise duty on goods imported to the territory of Ukraine (except for excise duty on petroleum products and vehicles imported to the territory of Ukraine);
  • revenues obtained from carrying out consular activities on the territory of Ukraine and 90 percent of revenues obtained from carrying out consular activities outside the territory of Ukraine according to the procedure established by the Cabinet of Ministers of Ukraine;
  • import duty (except for import duty on petroleum products and vehicles and also tires thereto);
  • 80 percent of revenues obtained by Budget-financed institutions and organizations for gold, platinum, metals of the platinum group, and precious stones delivered in the form of scrap and waste, and 50 percent of revenues obtained by Budget-financed institutions and organizations for silver delivered in the form of scrap and waste;
  • rental payment for the transportation of petroleum and petroleum products through trunk petroleum pipelines and trunk pipelines for petroleum products;
  • rental payment for transit transportation of ammonia;
  • 50 percent of the amount of the executive fee collected by the state executive service;
  • revenues from the National Joint Stock Company “Naftogaz Ukrayiny” as the repayment of debts under the Agreement between the Cabinet of Ministers of Ukraine and the Government of the Russian Federation on transferring heavy bombers TU-160 and TU-95 MS, long-range air-based cruise missiles, and equipment from Ukraine to the Russian Federation;
  • the fee for the allocation of numbered resources;
  • the fee for the allocation, re-registration and the extension of the validity period of licenses for using radio frequency resources of Ukraine and the issuance of duplicates of such licenses;
  • the fee for ponds transferred into lease that are located in the basins of rivers of national importance;
  • the fee for customs clearance of goods and vehicles outside the place of location of customs bodies or outside the working hours established for customs bodies (from the moment when Ukraine gains membership in the World Trade Organization);
  • customs duties (before the moment when Ukraine gains membership in the World Trade Organization);
  • revenues from sale of special permits for the utilization of deposits and the fee for the issuance of such permits;
  • revenues from the Secretariat of the United Nations Organization, the Organization for Security and Cooperation in Europe or some other regional organization for the participation of the Ukrainian contingent of the Armed Forces of Ukraine in peace-keeping operations;
  • 40 percent of revenues from the issuance of certificates for export and import operations that involve narcotic substances, psychotropic substances and precursors;
  • other revenues that shall be subject to the inclusion into the State Budget of Ukraine according to Article 29 of the Budget Code of Ukraine.
2) revenues of the Special Fund of the State Budget of Ukraine for 2007 shall include:
  • excise duty on petroleum products and vehicles that were manufactured in Ukraine;
  • excise duty on petroleum products and vehicles that were imported to the territory of Ukraine;
  • import duty on petroleum products and vehicles and also tires thereto;
  • 10 percent of revenues obtained from carrying out consular activities outside the territory of Ukraine;
  • revenues from the fee in the form of a targeted surcharge to the effective rate for electric energy and thermal energy;
  • 50 percent of the amount of the executive fee collected by the state executive service;
  • revenues from the sale of surplus space machinery and equipment designated for military and dual purposes that belong to the National Space Agency of Ukraine;
  • revenues from the sale of surplus armaments, military and special machinery and equipment, other assets of military formations and units (except for the Armed Forces of Ukraine) and also law enforcement bodies that were set up according to the Ukrainian laws;
  • 80 percent of revenues to the State Specialized Fund for financing general state expenditures on aviation activity and the participation of Ukraine in international aviation organizations;
  • revenues to the Fund for Social Insurance of Disabled Individuals;
  • 65 percent of the fee for the pollution of the natural environment and also monetary penalties and fines for damages inflicted by the violation of the legislation on the protection of the natural environment as a result of business and other types of activity;
  • 70 percent of revenues from the fee for organizing touring performance-based events;
  • 74.55 percent of the fee for prospecting and exploration works carried out at the expense of the State Budget of Ukraine;
  • revenues from the fee for executing an identification card of an ethnic Ukrainian national residing abroad;
  • revenues from the State-Owned Enterprise “National Atomic Energy Generating Company ‘Energoatom’” from the repayment of the company’s debts to the targeted sectoral fund for the creation of a nuclear fuel cycle in Ukraine for purchased concentrated natural uranium and nuclear fuel delivered thereto on the basis of a compensation during 1994-1999 in the amount of UAH 165,687,000.00;
  • revenues from the fee for the development of viticulture, horticulture and hop-growing;
  • revenues from the State-Owned Enterprise “National Atomic Energy Generating Company ‘Energoatom’” according to Article 7 of the Law of Ukraine “On Regulating Issues Related to the Support for Nuclear Safety”;
  • revenues from the fee in the form of a targeted surcharge to the effective rate for natural gas for consumers of all types of ownership;
  • revenues from energy generating companies for the repayment of debts to the State Committee for the State Material Reserve of Ukraine for organic fuel that was delivered during 1997-2000, but no less than UAH 50,000,000.00;
  • payments related to the fulfillment of the Agreement between the Government of Ukraine and the Government of the Russian Federation on the Participation of the Russian Federation in the Development of the Socio-Economic Area of the City of Sevastopol and Other Settlements Where Military Units and Formations of the Black Sea Fleet of the Russian Federation Are Deployed on the Territory of Ukraine;
  • revenues from selling military camps and other real estate of the Armed Forces of Ukraine;
  • revenues that shall come from payments for utilizing the Budget loan within the limits of the regime for secured government procurements of grain;
  • revenues from payments for expenditures related to informational and technical support for the examination of cases in courts;
  • the registration fee for carrying out state registration of rights and their encumbrances.

The national debt and the financing for the State Budget of Ukraine shall be specified in Chapter III of the present Law.

Provisions of the present Law shall identify that, as of December 31, 2007, the marginal size of the domestic debt of Ukraine shall be equal to the amount of UAH 20,274,714,900.00 and to the amount of USD 1,033,911,900.00, while the marginal size of the external debt of Ukraine shall be equal to the amount that is equivalent to USD 9,890,764,500.00.

Also, the present Law specified that government domestic and international borrowings shall be carried out within the limits of the overall volume of the marginal sizes of the domestic debt of Ukraine and the external debt of Ukraine.

Legal entities with respect to which the decision is made to provide loans or guarantees (except for the State Motor Road Service of Ukraine) shall provide irrevocable and unconditional cross guarantees of banks that, during 2005-2007, have adhered to the mandatory economic standards established by the National Bank of Ukraine, or shall provide other appropriate security and transfer a payment for receiving them to the State Budget of Ukraine in the amount established by the Cabinet of Ministers of Ukraine.

Also, the present Law shall establish that, in 2007, guarantees of the Council of Ministers of the Autonomous Republic of Crimea and guarantees of bodies of local government (except for guarantees under loans that are provided by international financial organizations or on conditions of co-financing together with international financial organizations) shall not be provided.

The present Law shall specify that the State Property Fund of Ukraine shall ensure that revenues to the State Budget of Ukraine from privatization of state-owned property in 2007 shall constitute an amount that is not lower than UAH 10,587,711,000.00.

In the process of fulfilling the State Budget of Ukraine, the Ministry of Finance of Ukraine shall, in exceptional instances and on the basis of a substantiated petition from the main manager of the State Budget funds, re-distribute expenditures under Budget-financed programs in the context of the economic classification within the limits of the general volume of its Budget allocations separately for the General Fund and the Special Fund of the State Budget of Ukraine. Re-distribution of Budget allocations under Budget-financed programs within the limits of the general volume of the main manager of the State Budget funds and an increase in Budget allocations for development expenditures by way of reducing Budget allocations for consumption expenditures separately for the General Fund and the Special Fund of the State Budget of Ukraine shall be effectuated only upon agreement of the Budget Committee of the Verkhovna Rada of Ukraine. The transfer of Budget allocations envisaged by part six of Article 23 of the Budget Code of Ukraine and also re-distribution of Budget allocations for centralized measures and programs among administrative and territorial units shall be carried out upon agreement of the Budget Committee of the Verkhovna Rada of Ukraine according to the procedure established by the Ministry of Finance of Ukraine.

It shall be prohibited to increase Budget allocations under the General Fund and the Special Fund of the State Budget of Ukraine for:
    • labor remuneration of employees of Budget-financed institutions by way of reducing other expenditures;
    • expenditures under Budget-financed programs related to the functioning of government bodies by way of reducing other expenditures.

The list of Budget-financed programs for which the procedures for using funds of the State Budget shall be approved shall be determined by the Cabinet of Ministers of Ukraine.

The present Law shall approve the list of protected articles of expenditures of the General Fund of the State Budget of Ukraine for 2007 in terms of the economic structure of expenditures, namely:
  • labor remuneration of employees of Budget-financed institutions (code 1110);
  • payroll taxes (code 1120);
  • purchases of medications and bandaging materials (code 1132);
  • support with food products (code 1133);
  • payment for residential services and energy resources (code 1160);
  • payment of interests under the national debt (code 1200);
  • transfers to the population (code 1340);
  • transfers to local budgets (code 1320).

Protected expenditures of the State Budget of Ukraine for 2007 shall be expenditures on building (purchasing) residential premises for servicemen, reforming and developing the Armed Forces of Ukraine, carrying out intelligence activities, providing for viability and also explosion and fire safety of arsenals, armament bases and depots, missiles, and ammunition of the Armed Forces of Ukraine, recycling ordinary types of ammunition that are not suitable for further storage and utilization, providing disabled individuals with prosthetic and orthopedic devices, means for movement and rehabilitation, training specialists by higher educational institutions with levels of accreditation I-IV, carrying out fundamental research, working on applied scientific and also scientific and technical developments, and also settling and providing with the necessary facilities deported Crimean Tatars and individuals of other ethnic nationalities that were deported from the territory of Ukraine, and compensating losses to the Pension Fund of Ukraine for the application of a special rate for the contribution for universal mandatory state pension insurance by payers of fixed agricultural tax.

Revenues of the General Fund of local budgets in 2007 shall include:
  • personal income tax;
  • single tax and fixed tax (except for the part of these taxes that is transferred to the Pension Fund of Ukraine and deductions for mandatory social insurance) and the full amount of fixed agricultural tax;
  • excise duty on goods that were manufactured in Ukraine (except for excise duty on petroleum products and vehicles that were manufactured in Ukraine) that is paid by payers registered in the Autonomous Republic of Crimea shall constitute revenues of the Budget of the Autonomous Republic of Crimea, including those taken into account at the time of identifying inter-budgetary transfers;
  • the fee for licenses for the right to engage in retail trade in alcoholic beverages and tobacco products shall constitute revenues of the Budget of the Autonomous Republic of Crimea, oblast budgets and municipal budgets of the cities of Kyiv and Sevastopol;
  • payment for water bodies of local importance transferred into lease;
  • penal sanctions as a result of the failure to fulfill agreements concluded by a manager of budget funds with business entities for the purpose of purchasing goods, works and services at the expense of funds of local budgets;
  • penal sanctions for the violation of the legislation on patenting;
  • revenues that are subject to transfer to the General Fund of local budgets;
  • funds that will come from the participant who won the procurement procedure at the time of concluding the relevant procurement contract and ensuring its fulfillment that are not subject to return to participants in the bidding procedure in the instances envisaged by the Law of Ukraine “On the Procurement of Goods, Works and Services for Budget Funds” in the part related to procurements at the expense of funds of the Budget of the Autonomous Republic of Crimea and local budgets;
  • funds that will come from the participant who won the procurement procedure at the time of concluding the relevant procurement contract and ensuring its fulfillment that are not subject to return to the winning participant according to terms and conditions of the relevant contract in the part related to procurements at the expense of funds of the Budget of the Autonomous Republic of Crimea and local budgets.

According to the present Law (Article 51), in 2007, the amounts of equalization subsidies to local budgets shall be transferred by the relevant departments of the State Treasury of Ukraine in the Autonomous Republic of Crimea, oblasts and the city of Sevastopol by way of applying the norms for daily deductions to revenues of the General Fund of the State Budget of Ukraine that were included into analytical accounts for tracking revenues of the State Budget of Ukraine on the relevant territory.

Revenues of the General Fund of the State Budget of Ukraine that are used for transferring equalization subsidies shall include:
  • corporate profit tax;
  • value-added tax (without due consideration for Budget refunds of value-added tax with the help of pecuniary resources);
  • the fee for special utilization of forest resources of state importance;
  • the fee for special utilization of water;
  • payments for the utilization of deposits of national importance;
  • excise duty on goods that were manufactured in Ukraine (except for excise duty on goods that were manufactured in Ukraine that is paid by payers registered in the Autonomous Republic of Crimea and excise duty on petroleum products and vehicles that were manufactured in Ukraine);
  • excise duty on goods imported to the territory of Ukraine (except for excise duty on petroleum products and vehicles imported to the territory of Ukraine);
  • the fee for licenses for certain types of business activity (except for the payment for licenses issued by the Council of Ministers of the Autonomous Republic of Crimea, executive bodies of local councils and local bodies of executive power, and the fee for licenses for the right to engage in retail trade in alcoholic beverages and tobacco products);
  • import duty (except for import duty on petroleum products and vehicles and also tires thereto);
  • import duty;
  • payment for integral property compounds and other state-owned property transferred into lease;
  • state duty in the part that, according to the law, shall be transferred to the State Budget;
  • single duty that is paid at the border crossing points along the state border of Ukraine;
  • funds that are transferred to the State Budget of Ukraine from oblast budgets, municipal budgets of cities and towns of republican importance in the Autonomous Republic of Crimea and of oblast importance, and also from district budgets.

The present Law shall envisage that maternity benefit for child birth and for child care until the child reaches the age of three, according to the Law of Ukraine “On Government Support for Families with Children” and the Law of Ukraine “On Universal Mandatory State Social Insurance Due to Temporary Disability and Expenditures Caused by Birth and Burial” shall be provided at the expense of funds of the relevant subvention from the State Budget of Ukraine to local budgets in the following amounts:
  • maternity benefit for child birth – in the amount of UAH 8,500.00. This maternity benefit shall be paid by way of a one-time payment when the child is born in the amount of UAH 3,400.00, while the rest shall be paid during the next twelve months in equal portions;
  • maternity benefit for child care until the child reaches the age of three – in the amount that shall equal the difference between 50 percent of the minimum subsistence level established for employable individuals and the average monthly aggregate income of the family calculated per one family member for the previous six months, but not less than UAH 90.00 for uninsured individuals and not less than 23 percent of the minimum subsistence level established for employable individuals for insured individuals according to the procedure established by the Cabinet of Ministers of Ukraine.

The present Law shall establish the minimum subsistence level per one individual per one month for 2007 in the amount of UAH 492.00 from January 1, 2007, UAH 525.00 from April 1, 2007, and UAH 532.00 from October 1, 2007, and for those included into the main social and demographic groups of the population:
  • for children aged up to six: UAH 434.00 from January 1, 2007, UAH 463.00 from April 1, 2007, and UAH 470.00 from October 1, 2007;
  • for children aged from six to eighteen: UAH 558 from January 1, 2007, UAH 595.00 from April 1, 2007, and UAH 604.00 from October 1, 2007;
  • for unemployable individuals: UAH 380.00 from January 1, 2007, UAH 406.00 from April 1, 2007, and UAH 411.00 from October 1, 2007.

Bodies of the State Treasury of Ukraine shall track obligations of managers of Budget funds according to the procedure established by the State Treasury of Ukraine and shall reflect them in the reporting on the fulfillment of the State Budget of Ukraine and local budgets.

Managers of Budget funds shall undertake Budget-financed obligations and shall effectuate the relevant expenditures under the General Fund of the State Budget only within the limits of Budget allocations established by budget estimates, with due consideration for the need to fulfill Budget-financed obligations of the previous years that were registered by bodies of the State Treasury of Ukraine and in the instance of their compliance with Budget passports. Managers of Budget funds shall undertake obligations under the Special Fund of the State Budget exclusively within the limits of the relevant actual revenues to the Special Fund of the State Budget.

At the same time, obligations related to the payment of subsidies, benefits, discounts for payments for consumed residential services, and compensations to nationals from the State Budget, for which the relevant categories of individuals have the right according to Ukrainian laws, shall be tracked by bodies of the State Treasury of Ukraine, regardless of Budget allocations determined for this purpose.

Obligations undertaken by managers of Budget funds without the relevant Budget assignments shall not be considered Budget-financed obligations and shall be financed at the expense of Budget funds. The undertaking of such obligations shall be a Budget-related offence.

Any expenditures related to maintenance of Budget-financed institutions may be supported by managers of Budget funds in the instance, when there are no outstanding wage arrears (cash support) and also outstanding debts for consumed residential services and energy resources.

The present Law shall provide for prohibiting in 2007:
  • restructuring of arrears of business entities to the state under loans attracted by the state or under state guarantees, under Budget-financed loans and financial assistance provided on a repayable basis, except for the spreading out of their repayment at the time of readjustment of such a business entity with the participation of an investor that shall undertake solidary obligations related to the repayment of such arrears within the period that shall not be longer than three years. At the same time, the amount of a fine on the restructured amount of arrears that shall be calculated as a result of the failure of the borrower to fulfill obligations under such a loan, a Budget-financed loan or financial assistance shall be written off;
  • write-off of arrears of business entities to the state under loans attracted by the state or under state guarantees, under Budget-financed loans and financial assistance provided on a repayable basis, except for arrears of business entities that were recognized bankrupt according to the established procedure, where claims related to the repayment of their arrears were not satisfied because of insufficient assets thereof, and enterprises of community organizations of disabled individuals under targeted loans to departments of the Fund for Social Insurance of Disabled Individuals;
  • the provision of deferment regarding the deadlines for paying tax obligations of business entities related to taxes and duties (mandatory payments).

The Cabinet of Ministers of Ukraine shall be given the right to write-off targeted loans provided by departments of the Fund for Social Insurance of Disabled Individuals to enterprises of community organizations of disabled individuals whose deadline for repayment expired before January 1, 2007, according to the procedure established by the Cabinet of Ministers of Ukraine. 

The size of the minimum monthly wage (Article 76 of the present Law) shall be:
  • UAH 400.00 per month from January 1, 2007;
  • UAH 420.00 per month from April 1, 2007;
  • UAH 440.00 per month from July 1, 2007;
  • UAH 460.00 per month from October 1, 2007.

The Cabinet of Ministers of Ukraine shall identify the marginal number of employees of local state administrations, including of their offices, and expenditures on their maintenance (Article 86 of the present Law).

The present Law shall contain Appendices that shall constitute an integral part of the present Law. Appendices to the present Law shall be:
  • Revenues of the State Budget of Ukraine for 2007;
  • Financing of the State Budget of Ukraine for 2007;
  • The distribution of expenditures of the State Budget of Ukraine for 2007;
  • The return of loans to the State Budget of Ukraine and the distribution of the provision of loans from the State Budget of Ukraine in 2007;
  • The distribution of expenditures on centralized measures and programs for 2007 among administrative and territorial units;
  • Indicators of inter-budgetary transfers (equalization subsidies and funds that are transferred to the State Budget) between the State Budget of Ukraine for 2007 and local budgets for 2007;
  • Indicators of inter-budgetary relations between the State Budget of Ukraine for 2007 and local budgets for 2007;
  • The list of bodies that shall be responsible for overseeing the collection (transfer) of payments to the State Budget of Ukraine.
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