17. The State Treasury of Ukraine

 

The State Treasury of Ukraine (hereinafter referred to as “Treasury”) is a governing body subordinated to the Ministry of Finance of Ukraine and being a part thereof. The Treasury is a member of electronic payments system of the National Bank of Ukraine.

The main objectives of the Treasury are:

• Provision of treasury services regarding the state and regional budgets on the basis of introduction of a single treasury account which secures:

• cash management services to spending units and beneficiaries of budget funds;

• control over budget competence in crediting proceeds, assuming liabilities and making payments with regard thereto;

• control, within the limits of Treasury’s competence, over compliance of budgetary process participants with the budget legislation;

• accounting and reporting on the execution of the state and regional budgets;

Management of available financial resources accounted by the Treasury;

The State Treasury of Ukraine is a governmental body operating as part of the Ministry of Finance of Ukraine and is subordinate thereto.

The State Treasury of Ukraine is financed from the State Budget of Ukraine. The State Treasury of Ukraine and its local bodies have their own estimates, registration and other budget accounts both in the Treasury and in banks.

Ukrainian treasury system has a 3-level structure and consists of: the State Treasury of Ukraine located in the capital of Ukraine and representing its central level; main departments of the State Treasury of Ukraine representing its regional level, in particular: 1 main department – in Crimea; 2 main departments – in Kyiv and Sevastopol; 24 main departments in regions; district (municipal, city district) departments (a total of 633) located in important local administrative centers.

The 3-level structure of the State Treasury of Ukraine which is close to the administrative and territorial division of Ukraine allows to serve local budgets in accordance with the budget code. It is a natural stage of reorganization of the budget sphere where treasury plays an important role.

The State Treasury of Ukraine comprises 660 local bodies with 16,000 employees.

The Treasury is chaired by the Head of the State Treasury of Ukraine who is appointed and dismissed by the Cabinet of Ministers of Ukraine upon recommendation of the Minister of Finance.

The Head of the State Treasury of Ukraine carries out general management of the Treasury, is personally responsible for treasury’s activities, determines powers and distributes functions between deputies.

18. Taxation

The peculiarities of the Ukrainian Taxation Code lie in the evolutionary approach to improving the Ukrainian Taxation system.

Taxation of physical entities income. Introduction of tax – exempt minimal income corresponding to the poverty line and three tax rates instead of operating five tax rates should be the basis for improving taxation of entities income.

Property tax. The concept proposes to unite three taxes in one – two taxes already exist (a tax on vehicle owners and land payment ) and one has not been effected yet ( a real estate tax).

Local taxes and dues. The concept envisions changes in the structure of local taxes and dues, because some of them do not play an essential role in the budgets replenishment, but require considerable administrative expenses.

American Taxation system have some principle of taxation. The first one is the benefit principle.

And it is the second principle – the ability to pay principle. Most taxes can be classified as progressive, regressive, and proportional by their economic impact on the firms that have to pay them.

A regressive tax is one that takes a higher percentage of a low income and lower percentage of a high income.

A proportional tax takes the same percentage of all incomes, regardless of size.

If income tax is designed to be progressive, it means that it takes a larger fraction of high income than of low income.

A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government.

Taxes may be direct or indirect. Direct are collected from income of individuals and businesses. Indirect are levied on the production or sale of goods and services, they are included in the price paid by final purchaser.

Of course, in different countries there are its specialties. But, for example, in Ukraine, UK, the USA some taxes are similar – income tax, VAT, excise tax, corporate income tax. In each country some of them have different titles.

Each of them has specialties in imposition: in Ukraine there are state and local taxes and fees, in the USA taxes are imposed at federal, state and local levels, in the UK there are 2 levels – central government revenues and local government revenues.

Tax year in Ukraine starts from 1^st Jan till 31^st of Dec, in the UK – from 6^th April to 5^th April of the newt year, in the USA it begins on the 10^th of October to the 9^th of Sept of the next year.

In all this countries corporate income tax is paid (in the USA – income tax, in the UK – corporation tax). Rates are: in UA – 16%, the USA – from 15% to 35%, the UK – 28%.

Also there are peculiarities of levying personal income tax (in USA – payroll tax, UK – income tax); differences are: 1) in the UK it is the largest sourse of revenues; 2) in the USA this tax includes Social Security and Medicare taxes; 3) in UA the base of taxation are wages, other incentives that are paid to taxpayer. Rates: in UA – 15%, in USA – 15,3%, in UK basic rate is 20%.

Also there are some differences in VAT, but in UA and UK there is 0-rated goods and the same types of items are imposed and exempted. VAT is the 3^rd largest source in the UK. In the USA it is called sales tax.

In UA and USA excise tax is imposed, it is indirect tax and is paid by the customers. In UA it is levied on excisable commodities like alcohol, tobacco etc to the state budget; in the USA – it is imposed at the Federal and State levels on excisable items (+ telephone services and air transportations). The rates in both countries are differentiated and depend upon the item and its volume.

Every country has its own taxes. For example, in the UK – fuel duty, council tax, climat change levy and national insurance contributions.

The US citizens pay Social Security and Medicare tax, unemployment tsx, sales tax, estate and gifts taxes etc.

And in UA there are the largest number of taxes paid – 135 payments.

Americans pay 11 payments; the UK – 17. The total tax rate – UA – 57,1%, USA – 46,7%, UK – 37,3%.