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The president and the government would gladly use this tool to stimulate Ukraine's economy.
Ukrainian President Volodymyr Zelensky's adviser, Executive Director at the Bleyzer Foundation Oleh Ustenko says there are no opportunities for cutting taxes as an economic incentive now, but the situation may change.
"As for fiscal methods, President Zelensky, as well as the Cabinet of Ministers, would gladly use this channel to stimulate our economy. But we also need to realize that we have got a budget deficit now. A new draft national budget, which has been submitted to the Verkhovna Rada and is now rightly criticized, has a deficit that is slightly above 2%, which means we don't have the so-called 'fiscal room' to stimulate the economy," he said as a forum on September 23.
"This [fiscal room] may appear later if there are opportunities," the expert added.
Ustenko says that neither the government nor the president can influence the monetary policy since the National Bank is a completely independent financial institution. Therefore, the authorities could only stimulate the economy by improving the country's business climate and intensifying investment activities.
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"What could be used as an incentive for the business climate to get better and for investment to become more active? Reducing corruption, which, according to some estimates, reaches about US$10 billion, fighting smuggling, which may reach between US$5 billion and US$10 billion, and ensuring progress in the Doing Business ranking. Then we'll see a sharp increase in the quality of the economy and a real breakthrough," he summed up.
As UNIAN reported earlier, in the middle of September, Ukrainian Prime Minister Oleksiy Honcharuk said the Cabinet of Ministers plans to gradually reduce taxes and make them equal for all taxpayers in 2020.
According to the official, the government aims to collect smaller amounts of taxes, but spend them more efficiently.
Ukraine's Cabinet of Ministers has tabled the draft law on the State Budget of Ukraine for 2020 in parliament, which provides for UAH 1.079 trillion (US$44.2 billion) in revenue and UAH 1.170 trillion (US$47.9 billion) in expenses. The maximum deficit of the 2020 national budget is set at UAH 95 billion (US$3.9 billion) of GDP, while the state and government-guaranteed debt is fixed at 54.1 % of GDP.
The draft budget for 2020 is based on 3.3% GDP growth, the current macroeconomic forecast with an exchange rate set at UAH 28.2 per U.S. dollar. However, the government promised to finalize the project taking into account the updated forecasts.