DiXi Group Logo
uk
www.upscalerolex.to
18.11.2019

Environmental tax in Ukraine: where do moneys go and what should be changed?

To the state budget’s general fund:

45% of environmental tax;

100% of environmental tax charged for carbon dioxide emissions by stationary sources of pollution.

To the state budget’s special fund:

100% of environmental tax charged for generating radioactive waste (including the already accumulated waste) and/or for temporary storage of radioactive waste by its producers beyond the period set by special licensing terms.

To the special fund of local budgets:

55% of environmental tax; including 25% to village, city and unified territorial community budgets, 30% to regional and AR Crimea’s budgets, 55% to Kyiv and Sevastopol city budgets.

Allocations from the general fund are spent on financing various expenditures without concrete specific purpose.

Revenues of the special fund of the state and local budgets must be spent according to the specific purpose of financing environmental protection measures.

 

Challenges:

Lack of financing: almost half of environmental tax is “diluted” in the general fund of the State Budget.

Inefficient approach to environmental tax: “narrow” understanding of environmental tax in Ukrainian society.

Absence of specific purpose and insufficient transparency of spending: the list of environmental protection measures and the corresponding spending procedures allow to finance, inter alia, measures unrelated to environmental protection.

  • Recommendations

What needs to be done:

  1. Applying the principle of preventing or mitigating environmental damage and the “polluter pays” principle.
  2. Revising the distribution of environmental tax revenues among state budget’s funds.
  3. Revising the lists of environmental protection measures.
  4. Increasing public control over the spending of environmental tax revenues.

How it can be done:

  1. By studying the best practices of environmental tax management, including variants of this tax’s structure.
  2. By amending the Tax and Budget Codes, and accumulating environmental tax revenues in the special fund(s) to be spent solely for specific purposes.
  3. By amending government acts and relevant resolutions of local authorities.
  4. By fully implementing the Extractive Industries Transparency Initiative (EITI) in Ukraine, including the new, 2019 standard.

 

This article is made possible by the support of the American People through the United States Agency for International Development (USAID) within the framework of the USAID Energy Sector Transparency Project, which is implemented by NGO DiXi Group.
The contents are the sole responsibility of DiXi Group and do not necessarily reflect the views of USAID or the United States Government.

Comments

Disclosure of resource extraction contracts is important for Ukraine’s compliance with international environmental conventions

Olha Polunina

Manager for Sustainable Development

Disclosure of resource extraction contracts is important for Ukraine’s compliance with international environmental conventions

Ukraine has time until July 2022 to submit a plan of action, including a time schedule, and until October 2023 to provide a detailed progress report.

Ukraine Follows a Fossil Fuel Recovery Pathway

Yuliia Oharenko

expert of the DiXi Group project “Promoting Ukraine's Participation in the European Green Deal in the fields of energy and environment”

Ukraine Follows a Fossil Fuel Recovery Pathway

Despite multiple political statements supporting the European Green Deal and announced plans for the development of a joint with the EU Roadmap, Ukraine is moving in an opposite direction. These are the results of Energy Policy Tracker

The “Augean stables” of the extractive sector: is there any progress?

The “Augean stables” of the extractive sector: is there any progress?

The practice of procuring special extraction permits and then sitting idle on them for decades is unacceptable from the viewpoint of Ukraine’s energy independence and national security, raising budget revenues and the country’s investment attractiveness.

Ukraine improves its ranking under the EITI Standard

Olha Polunina

Manager for Sustainable Development at DiXi Group

Ukraine improves its ranking under the EITI Standard

The EITI Board acknowledged Ukraine’s efforts concerning disclosure of beneficial ownership information, creation of an online EITI reporting portal, and the launch of EITI implementation monitoring and assessment at national level.

Energy Transparency Index 2020: International Dimension

Bohdan Serebrennikov

Manager on consultancy and analytical services

Energy Transparency Index 2020: International Dimension

In 2020, we present the results of the first such research for the three Eastern Partnership countries – Ukraine, Moldova and Georgia.

Our platforms

https://ksep.energy/en/

Independent energy educational center

http://eiti.org.ua/

National website of Extractive Industries Transparensy Initiative in Ukraine 

http://ua-energy.org/

Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform

Our platforms

https://ksep.energy/en/

Independent energy educational center

http://eiti.org.ua/

National website of Extractive Industries Transparensy Initiative in Ukraine 

http://ua-energy.org/

Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform