Sienkevych about the consequences of the loss from the personal income tax: «We are gradually reducing people and optimizing work»

The company «Ernst&Young» is working on optimizing the work of Mykolaiv City Council bodies, which will include, in particular, a reduction in the number of employees. At the same time, Mayor Oleksandr Sienkevych assures that the situation with the budget is under control.

The mayor told about this in a comment to the correspondent of NikVesti.

Commenting on the situation related to the loss of personal income tax for the first months of 2024, Oleksandr Sienkevych said that the main problems that exist today are a decrease in funding for current road repairs. In addition, the city refused to implement a number of projects, diverting money to current expenses.

«Now everything is going as we planned. In principle, understanding that personal income tax will be taken from us, we planned the budget this year to be minimal. In fact, today there are problems with the road fund. Today, for example, we have five times less money allocated for current pothole repair than last year. And in this sense, as long as the situation remains under control, that is, it has not improved or worsened, we are still using the money that is left. We stopped many of last year's projects and redirected funds to the necessary articles. Now, while we have enough money for our planned things, first of all, pay salaries, pay utilities, repair some housing, repair shelters that we want to start. While the situation is under control, I cannot say that today we have a hole in the budget that we cannot close,» said Oleksandr Sienkevych.

Also, the city, together with Ernst&Young, is currently working on the reorganization and optimization of the work of executive authorities. One such example will be the unification of the Department of Architecture and Land Resources Management.

«We are slowly reducing people now due to lack of work. In addition, the company «Ernst & Young» is currently working on this issue, studying our structure. And in the near future, in May, they will come out with a proposal about how they see optimization. The first step towards optimization will be the issue of unification of the Department of Architecture and Land Resources Management adopted at the next session. And by reducing the number of people who double there,» the mayor added.

Prior to that, the mayor of Mykolaiv, Oleksandr Sienkevych, announced that the city council would reduce the number of employees due to the reduction of the city's budget by almost two times.

This is due to the fact that within the framework of the law «On the state budget for 2024», the Cabinet of Ministers planned to direct all revenues from the personal income tax of military personnel, 64% of which currently remain in local budgets, to the state budget. The Association of Cities of Ukraine believes that these funds will most likely be dissolved in the state budget, as well as 36% of the current personal income tax, which is administered by the Ministry of Finance. We are talking about 25.8 billion hryvnias this year and 93.7 billion hryvnias next year, Prime Minister Denys Shmyhal clarified earlier.

The Verkhovna Rada of Ukraine can allocate over 517 million hryvnias to the communities of the Mykolaiv region to compensate for the loss of personal income tax from military income.

And on October 6, 2023, it was reported that the Budget Committee of the Verkhovna Rada reviewed the decision on the draft law on personal income tax from the military and made amendments: from October 1 to December 31, 2023, the «military» personal income tax is directed to the state budget in the ratio of 50% to 50%. One part of 13 billion hryvnias will go to the State Service for Special Communications and Information Protection of Ukraine for drones, and the second part, also 13 billion hryvnias, will be directed to the Ministry of Defense for the purchase of artillery systems.

Earlier, the mayor of the city Oleksandr Sienkevych said that the military personal income tax withdrawn from the budget of Mykolaiv will be directed to the manufacture of weapons, in particular, drones for the Armed Forces of Ukraine.