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Ukrainian parliament passes laws cutting budget expenditures, raising taxes

March 28, 2014, 7:54 UTC+3 KIEV
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KIEV, March 27 /ITAR-TASS/. Ukraine’s Verkhovna Rada (parliament) on Thursday, March 27, passed a law that cuts budget revenues by 5.67 percent to 372.9 billion hryvnias (34.94 billion U.S. dollars at the current exchange rate) and expenditures by 5.5 percent to 436.7 billion hryvnias (40.92 billion U.S. dollars).

The budget deficit cap was lowered by 4.19 percent to 68.9 billion hryvnias (6.43 billion U.S. dollars) and the state debt ceiling raised by 13.41 percent to 664.009 billion hryvnias (62.22 billion U.S. dollars of GDP).

The law also freezes any raise in the subsistence level and minimum wage, which will remain at the current level of 1,176,000 hryvnia (110.19 U.S. dollars) and 1,218,000 hryvnias (114.13 U.S. dollars) a month, respectively.

The law authorises personnel cuts in the central government and local state administrations by at least 10 percent.

Parliament-appointed Prime Minister Arseny Yatsenyuk said the number of government officials would be cut by 24,249.

The government said GDP might shrink by 3 percent from 2013 and inflation might reach 12-14 percent.

The parliament also passed, on second try, a draft law on the prevention of a financial catastrophe and creation of prerequisites for economic growth in Ukraine.

It was passed by 246 votes. In their first attempt, the MPs fell short of the required 226 votes, with only 189 having supported the bill.

The draft law raises alcohol and tobacco excise taxes by 30-39 percent, and beer excises by 40 percent.

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