According to the estimates of experts of the Kyiv School of Economics in cooperation with government bodies, as of August 1 of this year, the total amount of direct losses to Ukraine’s economy from damage and destruction of residential and non-residential buildings and infrastructure (in monetary terms) grew to USD 108.3 billion or UAH 2.9 trillion.
The key factor in the constant growth of the total amount of losses was the increase in the number of people’s damaged and destroyed homes.
This is the largest share in the total amount of losses. According to the latest data, at least 129,900 residential buildings were destroyed and damaged, of which 114,700 were private houses and 15,100 were blocks of flats. This problem affects hundreds of thousands of Ukrainians.
Direct losses as a result of the destruction of high-rise buildings amount to USD 4.3 billion, and another USD 5.4 billion in damages was caused to owners of private buildings. That is, we have about USD 47.7 billion in total! This is more than UAH 1.3 trillion.
It is no exaggeration to say that when people ask the state, local authorities, for help, in most cases, of course, not in all, the answer is the same: “there is no money!”.
It is perfectly understandable, the country is at war! The state and local budgets can barely withstand the military burden, the financing of the protected expenditures of the budget, there are not enough resources for capital expenditures. There is foreign aid, but certainly not in such volumes to solve the problem.
Despite this, Ukrainians, mostly on their own and at their own expense, often with the help of other caring people, are trying to repair and rebuild their houses, because no one canceled the change of seasons. People need a roof over their head, preferably a native and safe one.
Actually, if the state wants to count on the return of millions of our citizens to their homeland, then after the safety factor, the factor of native walls in the literal sense is exactly the argument that will be the main one in the decision-making process to return home or not.
No declarations about paradise in native land, “support programs” and other devices of the expert epistolary genre will weigh as much on the scales as having a native place where one can return and live.
So, ordinary taxpayers bear an extraordinary burden of expenses and costs on their shoulders in constantly changing and, to put it mildly, not the best conditions of ‘macroeconomic (in)stability’: inflation, exchange rate, new taxes, promises-cheats, etc.
According to the State Tax Service of Ukraine, in January-July of the current year, receipts (balance) to the consolidated budget for payments controlled by the State Tax Service amounted to UAH 625.4 billion. This is by UAH 102.5 billion, or by 19.6 percent more than in January-July 2021.
The state budget received UAH 418.1 billion, which is by UAH 79.1 billion, or by 23.3 percent more than the corresponding period last year.
UAH 207.3 billion was paid to local budgets. This is by UAH 23.4 billion, or by 12.7 percent more than in January-July 2021.
Earlier we estimated that during this period citizens transferred about UAH 30-35 billion for the needs of the Armed Forces of Ukraine, humanitarian and medical aid through volunteer organizations at the expense of their incomes and savings.
All this is in the conditions of loss of jobs, drop in incomes, decrease in savings. In addition, people also need to find hundreds of billions of hryvnias from 1.3 trillion to repair or restore their housing because of course not all of it is being rebuilt, at least now.
Under such circumstances, it seems absolutely appropriate to develop a draft law on amendments to Article 166 of the Tax Code of Ukraine on a tax discount for housing repair and restoration costs for citizens who do it at their own expense. The mechanism for the implementation of this norm needs to be developed and detailed, but if there is the grace and desire of the government officials, which is not seen yet, everything can be done. In addition to the effect of bringing order in tax affairs, this will be a great signal to society, to people, that the state cares not only about the budget, but also about citizens!
Not to turn twice to the same draft law, it is necessary to introduce changes to subsection 166.3.2 of the Tax Code, because it is not even anachronistic, but an antediluvian rule about 4% (sic!) of the amount of funds that can be attributed to the tax discount for expenses that taxpayers transfer to charitable non-profit organizations (read volunteers), does not correspond to the realities of our today’s life. What this percent should be can be discussed, but it is definitely not 4!
Therefore, in constant concern about the state budget, which is undoubtedly really important, I suggest that our legislators at least sometimes remember about ordinary citizens, who sometimes need help not so much as no interfering. If there is support, it will be good, it is necessary to develop and adopt the appropriate draft law for this. If there isn’t, I’m sure, our people will cope with everything by themselves, but trust in the state will definitely not increase.
KOSTIANTYN SHVABII
Professor, expert of the Growford Institute