Bill amending Ukraine's Budget Code passes second reading

The Verkhovna Rada, Ukraine's parliament, has passed bill No. 4100-d to amend the Budget Code of Ukraine, adapting it for further approval of the 2021 national budget.

Some 311 lawmakers supported the bill in the second reading with a required minimum of 226 votes, an UNIAN correspondent reported on December 15.

Read alsoRevised national budget draft for 2021 submitted to RadaIn particular, the document provides for the distribution of part (13.44%) of the excise tax on fuel between local governments' budgets.

The proposed amendments authorize the Finance Ministry to conduct transactions with government derivatives, including their exchange, issue, purchase, redemption, and sale through government borrowing in excess of the amounts determined for the current budget period by the law on the national budget to reduce the expected peak burden on the budget, the explanatory note to the bill said.

The draft law also involves the definition of government guarantees based on portfolios and the introduction of a mechanism for providing such guarantees to ensure the partial fulfillment of debt obligations of a loan portfolio.

In addition, the amendments envisage transactions by the State Treasury to raise funds from the Single Treasury Account to cover the temporary cash deficiency in the national budget's general fund, as well as the introduction of an automatic mechanism for returning funds erroneously and/or unnecessarily credited to the national and local budgets.

2021 national budget: Background

• The Verkhovna Rada passed a bill to amend to the Budget Code of Ukraine in the first reading on November 5.
• The draft national budget for 2021, which was approved by the Cabinet of Ministers on September 14, 2020, provides for revenue at UAH 1.07 trillion (US$38 billion), while spending at UAH 1.35 trillion (US$46.8 billion). The deficit is expected to be 6% of GDP next year. The budget deficit is capped at UAH 270 billion (US$9.4 billion).