Ukraine seeks deferral or reduction of EU budget contributions in accession talks

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Ukraine has asked for a deferral of payments and the introduction of a transitional period for taxes on non-recycled plastic packaging in EU accession negotiations.

Source: Roksolana Pidlasa, Chairperson of the Ukrainian Parliamentary Committee on Budget, on Facebook

Details: Pidlasa reported that following a formal screening of Ukraine’s financial and budget provisions (Chapter 33 of the EU accession negotiations), the National Bank of Ukraine will open an account to collect the four payments forming the country’s EU budget contribution.

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Quote: “Member state contributions fund 90% of the EU budget. When Ukraine joins the EU, we will make such contributions, too. Under the current EU budget allocation system, Ukraine is expected to be a net recipient of EU funds, which, to put it mildly, leaves many Eastern European governments uneasy about our accession”.

More details: Pidlasa said that Ukraine’s contribution to the EU budget will include:

• Customs duties (member states retain only 25% of these revenues, while 75% are forwarded to the EU budget);
• VAT (0.3%, but not exceeding half of gross national income);
• A monetary contribution proportional to gross national income.

The contribution will also include a levy on non-recycled plastic packaging (€0.80 per kilogram of waste). Ukraine, however, is seeking a transitional period after accession, as the legislation and infrastructure to account for such waste are not yet in place.

Furthermore, given significant defence spending and post-war reconstruction costs, Ukraine is requesting a temporary deferral or reduction of its EU budget contribution, which is drawn from collected VAT and calculated according to gross national income.

The screening of Chapter 33 is necessary to determine how Ukraine calculates gross national income, collects VAT and customs duties, and assesses the efficiency of these processes, Pidlasa added.

She also stressed that Chapter 33 represents one of the final sections of the legislative screening, which takes place immediately before the opening of negotiating clusters. Ukraine expects to complete the screening of all chapters by the end of September.

Background: Ukraine and the European Union are preparing to sign an updated trade agreement, which will expand quotas for agricultural products while maintaining protective mechanisms for EU member states’ markets.

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