The deputies of Chernihiv city Council supported the appeal to the country's leadership for the preservation of the tax,which makes local budget
At the plenary meeting 18 session of the 7th convocation of the Chernihiv city Council deputies supported the appeal of the Chernihiv city Council to the Verkhovna Rada of Ukraine, Cabinet of Ministers of Ukraine and the Ministry of Finance of Ukraine to prevent the abolition of the excise tax implementation entities retail trade of tobacco products. The appeal of the Chernihiv city Council to the Verkhovna Rada of Ukraine, Cabinet of Ministers of Ukraine and the Ministry of Finance of Ukraine to prevent the abolition of the excise tax implementation entities retail trade of tobacco products Dear Andrey Vladimirovich, Vladimir Ivanov, Alexander Alexandrovich! The Chernihiv city Council, after reviewing the draft law of Ukraine “On amendments to the Tax code of Ukraine and other laws of Ukraine concerning the abolition of the excise tax from realization by subjects of retail trade of tobacco products” published on the website of the Ministry of Finance does not support and strongly against the proposals on the withdrawal of retail excise tax on tobacco products based on the following justifications: 1. Will be the extraction of a stable source of income Better to leave the current rule, which effectively works and fills local budgets. If there would be a redistribution in the order determined by the Cabinet of Ministers of Ukraine included “manual” disbursement mechanism. There is a risk of disruption of stable filling of the budgets of local communities. 2. This will entail the centralization of resources and reducing confidence in the local authorities The authors of the innovations offered to “step back”. After the introduction of such Government actions none of the local community will have confidence in following the actions of the Government and of the reforms, in fact, providing some form of income to local governments and seeing the results income, the government is trying to take life again “on top” for redistribution. There will be a centralized fiscal resources at the highest levels. It turns out that one hand gave the money, and take another. When adopting such initiatives, after the abolition of retail excise tax on tobacco products, would be a “setback” decentralized reforms that may give rise to negative trends in the migration of a number of other resources at the highest level, which ultimately would negate all the efforts at decentralization. In December 2014, was carried out budgetary reform, which has shown significant positive results in 2015. Happened decentralization of resources and consequently eliminate subjective factors in the allocation of resources. Local excise tax acted as a compensator for the budgets of local governments instead of the 10% tax on profits and rental income from subsoil use. 3. Will drop the solvency of local budgets Under the current system means excise duty immediately after receipt to a budget account can actually be used for the appropriate expenses. The proposed changes receive appropriate community “earned” income will occur through a complex mechanism of redistribution, which would entail significant time delays and risks of shortfall in collected revenues. 4. Will increase corruption risks The local community is much more interested to collect the retail excise tax, and force to operate the point of sale “in the white” than Central bodies of Executive power. In addition, it will corrupt the risk of evasion of this tax. It is advisable to leave this type of income at the local level. 5. There will be growth of smuggling. Local excise tax is an effective instrument of fight against the shadow economy and smuggling. Through the comparison of the data for the payment by manufacturers of tobacco products state excise duty and local excise tax distributors of these products through the retail network, you can define counterfeit and illegal circulation. Now the local authorities of base level began to actively work in this direction. This claim and DFS, and Ukrspirt and ukrt?t?n the like. To enhance this function in the first reading the Parliament adopted the draft law on the municipal guards (No. 2890, n. d. V. Groisman. and others), which should become an effective instrument of control over execution of decisions of bodies of local self-government a base level for payment of taxes and fees, local excise tax. If you pay the excise tax on the highest level, the local authorities of base level may not be interested and will have the possibility of an effective fight against the informal sector. Since it will not they are received and technically it will be impossible to compare, calculate those who are engaged in smuggling in a particular locality will be impossible. 6. Disappear motivation to attract investors Local excise tax is a tool to stimulate the intensification of local economic development. Heads of communities, who worked tirelessly for the development of trade networks, have in their budgets more revenue from the local excise. But, those who have not worked with local businesses, deprived of additional revenue. So apply here “redistribution” is inappropriate, especially when you introduced the new system of incentive alignment. It will destroy the main principle of decentralization. When implementing the proposed initiatives will disappear any motivation to attract investors. 7. Tax evasion According to the Law of Ukraine of 19.12.1995 No. 481 “On state regulation of production and circulation of ethyl alcohol, cognac and fruit, alcoholic beverages and tobacco” annual fee for the license to export, import is 780 UAH, wholesale trade – 500 thousand UAH, and in accordance with the Interim order dated 13.05.1996 No. 493 annual fee for the license to export and wholesale is 1 700 UAH, for the right of import – 170 thousand hryvnias. Thus, the Ministry of economic development and DFS, which are the licensing bodies in this area for 12 years, did not initiate changes in Interim order No. 493 for the purpose of bringing its provisions into conformity with the norms of the legislation in terms of cost of licenses for export, import and wholesale trade in tobacco products and conditions of supply of tobacco products manufacturers. 8. Poor planning in excise duty from tobacco Separate codes for income and excise tax in terms of the types of excisable goods, including tobacco and tobacco products, is not provided. Planning revenue from the excise tax in the context of excisable goods, the Ministry of Finance not carried out. The Ministry of Finance provides the forecast revenue from the excise tax, including tobacco products, in accordance with the procedures approved by order of the Ministry of Finance dated 24.12.2010 ¹ 1646 “On methods of forecasting of receipts in the budget” (further - the Technique). Methods are unable to ensure the objectivity of the calculation and analysis of revenue from the excise tax on tobacco and tobacco products in the process of planning a profitable part of state budget. So, these Techniques define the algorithms of calculation of excise tax from the sale of tobacco products with a filter and tobacco products without a filter excluding the excise tax on other types of tobacco and tobacco products (raw tobacco, tobacco waste, tobacco Smoking, chewing tobacco and snuff, etc.). Existing techniques for forecasting revenue from the excise tax on tobacco and tobacco products do not fully take into account the indicators that affect the amounts of revenues of this tax to the budget, resulting in the planning of the state budget revenues from this tax is not justified. For this, local governments can receive significant income in case of redistribution of this tax. 9. Noncompetitive market conditions The actual tax burden is passed on to importers and manufacturers. However, the companies that will carry out wholesale purchase and retail sale of tobacco, will not be subject to specified tax. Will create non-competitive conditions in the industry. The state will destroy the competition in the market. As a result of these initiatives the city budget of the city of Chernihiv will lose about 27,0 million UAH, which will lead to underfunding of important activities and programmes aimed at improving the life of the territorial community in the sphere of housing and utilities sector, city beautification, road maintenance, social care, preschool and extracurricular education, economic development, and the like. The proposed changes concerning the excise tax on tobacco products would limit revenue-raising powers of local authorities the basic level, which is directly contrary to the principles of fiscal decentralization. Conducted phase i budget reforms have shown positive results in filling of local budgets and efficiency of local government basic level, so it is quite strange “dragging” earned by our efforts and financial resources on the budgets of higher levels. The adoption of these changes may give rise to negative trends in the migration of a number of resources at the highest level, would negate all the efforts at decentralization and discourages all of the local Council in taking further steps on decentralization and budget reform. The mayor is responsible for all the problems and population in the territory and therefore must have a corresponding resource. The adoption of these amendments and their approval by the Ministry of Finance of Ukraine certainly causing an increase in social tensions and reduce the support from local governments to Central bodies of Executive power responsible for formation and implementation of budget, financial and tax policy. On behalf of the territorial community of the city of Chernigov, requested to consider the interests of local government and to take action on the failure of the initiatives. Believe that You will not remain indifferent and thank you in advance on behalf of the residents of the city of Chernihiv. The press service of the Chernihiv city Council.Ïåðåâåäåíî ñåðâèñîì "ßíäåêñ.Ïåðåâîä÷èê": translate.yandex.ru.
Source: http://uzinform.com.ua/
