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The Cabinet of Ministers of Ukraine submitted to the Verkhovna Rada of Ukraine an updated state budget project for 2021. It decided to postpone the increase in the minimum wage to 6,500 hryvnia until December.
The Cabinet of Ministers of Ukraine presented today, November 27, the draft revised state budget for 2021. In it noThe increase in the minimum wage to 6.5 UAH was postponed from July 1 to December 1, 2021. This is expressed in the explanatory note of bill No. 4000 “About the state budget of Ukraine for 2021“ dated November 26.
“The main factor that influenced the revision of the revenue forecast of the state budget in the second reading is […] proposals to postpone the increase from July 1 to December 1, 2021, the minimum wage in the monthly amount of 6.5 thousand UAH, which affects the revenue side of the general fund of the state budget “, – said in the note explanatory document.
This influence was associated with an increase in budget income from income tax of 836 million UAH (which will reduce labor costs for employees), a decrease in the amount of transfers from taxes and collection on personal income to 1.27 billion UAH and a decrease budgetary revenue of value added tax amounting to 900 million UAH.
It should be noted that the budget was drawn up taking into account the instructions of the protocol of the Cabinet of Ministers of Ukraine to increase revenue.
Yesterday, November 26, the government approved the draft state budget of Ukraine for 2021 for the second reading. Its deficit was reduced compared to the first reading version.
Ukraine’s Finance Minister Sergey Marchenko explained that the state budget will spend 41 billion UAH on a gradual increase in the minimum wage in 2021. According to him, the updated state budget project for 2021 was agreed with the International Monetary Fund.
Since January 1, 2020, the minimum wage in Ukraine has increased by 13.2%, to 4,723 UAH. On August 25, the Verkhovna Rada passed a bill as a whole, which provides for an increase in the minimum wage to 5000 UAH. The decision took effect on September 1.
In July, Prime Minister Denis Shmyhal announced that by the end of 2021 the minimum wage would increase to 6,500 UAH. In 2022, according to him, it will amount to 6,700 UAH, and in 2023, 7,200 UAH.
