Head of a parliamentary finance committee says Kyiv faces budget cuts without additional foreign aid
Ukraine’s government needs an additional $5 billion every month to avoid deep budget cuts, a senior lawmaker has said, calling for more aid from foreign countries despite billions in aid already being provided by the United States. States and their European allies.
The head of Kyiv’s parliamentary committee on finance, taxation and customs policy, Danylo Hetmantsev, spoke on Tuesday about the impending shortcomings in comments to local media, pointing to growing economic problems related to the ongoing conflict with Russia.
“We have to borrow $5 billion a month. If we don’t get it, we’ll have to cut spending,” he said. “We have no potential in the economy to raise taxes. We cannot do without the help of our partners as long as the fighting continues.
The government collected about $3.4 billion in taxes last month but spent more than $8.4 billion in the same period, the official added.
Although Hetmantsev noted that Ukraine had received loans and grants from the United States and some allies in Europe – Finance Ministry data showing the country had received more than $5.1 billion in aid economic direct between January and May – he said this amount was not enough to cover the growing budget deficit.
Late last month, the Group of Seven (G7) countries agreed to send an additional $19.8 billion in aid to Kyiv, coinciding with a massive $40 billion aid package of Washington, although a significant portion of the latter was devoted to weapons and other military equipment. .
The war in Ukraine has taken a heavy toll on its economy, with the World Bank predicting a staggering 45% contraction in 2022. The fighting has also pushed up global food prices, with Ukraine and Russia accounting for around 40% of food exports. wheat in Ukraine. Eastern Europe, while retaliatory sanctions against Moscow have helped drive up energy costs around the world.
As head of Kyiv’s Finance Committee and National Recovery Council, Hetmantsev faced stiff opposition from Ukrainian businesses and the general public, with thousands signing a petition demanding his resignation in May. . An open letter attached to the petition criticized the official for backing recent tax increases, saying the hikes had discouraged investment in Ukraine.
Hetmantsev, however, refused to leave office, saying that critics “myths” and insisting that the government had taken the right approach.
“I don’t mean to shock you, but every state wants to collect as much tax as possible. The question is in the happy medium and the balance”, he said, adding that “We managed to find, we still manage to find and hopefully we can find [this balance] in the future.”
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