Hr, bil­lion eu­ros

Kyiv Post Legal Quarterly - - News - 65.5 74.4 66.2 France Spain Greece Por­tu­gal Ger­many Poland Slo­vakia Lithua­nia Ukraine Source: Euro­stat Pen­sion re­form Ukraine’s spend­ing on pen­sions

The of­fi­cially em­ployed pop­u­la­tion pays a uni­fied so­cial tax to sup­port the el­derly. The qual­i­fy­ing age is 60 for men and 57 for women, but the age will be set at 60 for both gen­ders by 2021.

A per­sis­tent re­ces­sion in the last two years has made it dif­fi­cult to fund pen­sions, cut­ting gross do­mes­tic prod­uct nearly in half in dol­lar terms – from about $180 bil­lion to just more than $94 bil­lion ex­pected next year.

Ac­cord­ing to the State Pen­sion Fund, the av­er­age monthly pen­sion across the coun­try as of Oc­to­ber was Hr 1,691 or about $70. With 42 per­cent in­fla­tion in the coun­try, and ben­e­fits in­creas­ing by only 13 per­cent in Septem­ber, the ma­jor­ity of the re­tired pop­u­la­tion are now los­ing ground.

Pal­try pen­sions force the el­derly into poverty or pro­pel them back into the work­force or to rely on friends or rel­a­tives.

Ukraine spends around 15 per­cent of its GDP on its el­derly, a high per­cent­age among na­tions.

The na­tion also has one of the heav­i­est tax bur­dens on busi­nesses. It is ranked 107th among 180 coun­tries in the tax bur­den rat­ing com­piled by au­di­tors PWC and the World Bank.

But th­ese tax rates mo­ti­vate many Ukraini­ans to avoid of­fi­cial em­ploy­ment or de­clare lower salaries, rob­bing the gov­ern­ment and pen­sion fund. At­tempts to fix the pen­sion sys­tem have stut­tered for more than a decade as the na­tion ran up sig­nif­i­cant deficits in its pen­sion sys­tem.

The Ukrainian gov­ern­ment is now faced with a se­ries of hard choices.

Life­long monthly mon­e­tary

al­lowances for judges 1,407 re­cip­i­ents (Hr 16,634)

Av­er­age pen­sion size Hr 1,692 The num­ber of pen­sion re­cip­i­ents 12.3 mil­lion

Dis­abil­i­tyDis­abili pen­sions 1.4 mil­lion­milli re­cip­i­ents (Hr, 1,456.)1,45

As part of a wider pol­icy to del­e­gate more author­ity and func­tions to re­gional and lo­cal gov­ern­ments, par­lia­ment voted to trans­fer al­most all land and real es­tate pow­ers from the State Ar­chi­tec­tural and Con­struc­tion In­spec­torate to mu­nic­i­pal au­thor­i­ties. The cen­tral body has been left to oversee “sig­nif­i­cant ob­jects” such as power sta­tions.

Rights to a land plot and a con­struc­tion per­mit can now be ob­tained in the same lo­cal depart­ment. The idea is to chan­nel the bu­reau­cracy to

Par­lia­ment’s de­ci­sion to ex­tend the mora­to­rium on the sale of agri­cul­tural land un­til Jan. 1, 2017 dis­ap­pointed many le­gal ex­perts.

“It’s taken a lot of rights from own­ers who can’t sell their plots,” said Alek­san­dra Fe­do­tova of Spenser & Kauf­mann. “It’s all been made very po­lit­i­cal.”

Lifting the ban would mean that ex­ist­ing land own­ers and agri­cul­tural com­pa­nies could use their land as col­lat­eral. But oth­ers ar­gue that reg­u­la­tion should come first to as­sure the land is val­ued at mar­ket prices.

The Agri­cul­ture Min­istry says it needed time, ap­prox­i­mately a year, to pre­pare peo­ple for lifting the mora­to­rium and in this way avoid “so­cial ten­sions.” This in­cludes draft­ing new leg­is­la­tion to al­low reg­u­la­tors to oversee the sale of land.

“This isn’t the first time we’ve heard this. I understand that the land mar­ket law is im­por­tant but it all de­pends on their in­ten­tion and in­ter­est. Now they seem to be more in­ter­ested,” Boichuk said.

“Many of my col­leagues dis­agree but I am ac­tu­ally sat­is­fied with the ex­ten­sion. I don’t feel we are really ready for this. We need to adopt proper leg­is­la­tion so that the land will be sold at mar­ket prices and vil­lagers will be pro­tected,” said Yuriy Zaremba, an as­so­ciate at Avel­lum Part­ners.

Still, other changes such as the ex­ten­sion of the min­i­mum agri­cul­tural land lease to seven years have made a dif­fer­ence to busi­nesses. “They used to have to re­new them ev­ery two or three years, now this has made things much eas­ier…it means they can plan for crop ro­ta­tion,” said Drobot­skiy.

A se­cu­rity guard and a ce­ment truck driver talk out­side a con­struc­tion site on Dec. 16 in Kyiv. (Volodymyr Petrov)

Newspapers in English

Newspapers from Ukraine

© PressReader. All rights reserved.