“Failure to turn subsidies into cash payments is detrimental to the entire economy of the country” – Aliona Babak

As noted by Samopomich MP, Aliona Babak, the government must fulfill the requirement of the law of Ukraine, adopted in December, and immediately approve the procedure of subsidies monetization. After all, the failure to turn subsidies into cash payments is detrimental to the entire Ukrainian economy and has already resulted in a collapse in the calculation of bills for housing and communal services for condominiums.

Various condominiums from different regions of the country have repeatedly addressed the MP concerning the fact that they are not receiving subsidies and benefits, and the fact that they have received offers from the social services offices to settle on the basis of the future payments for electricity. However, when obtaining funds condominiums cannot settle with other contactors – payments of wages, payments for the supply of materials and services.

As explained by Aliona Babak, this situation is due to the current program of housing subsidies, which allows “Naftogaz Ukraine” (one of the largest VAT payers) cover its VAT liability towards the state budget by means of subsidies and benefits for housing and communal services. That is, the budget does not receive “live” money from Naftogaz in the amount of subsidies and benefits.

“Unless the government turns the compensation to residents living in condominiums into cash payments in full in March, the crisis in housing and communal services will further escalate.

However, an even greater problem will be the liquidity of the budget, because the budget is not receiving revenues from the VAT of Naftogaz; by the end of the year this sum will have amounted to nearly 52 billion UAH.

Thus, we have no right to postpone the monetization of subsidies until October – as the Prime Minister proposed to do. Back in December, lawmakers passed a law which obliged the Cabinet to approve the subsidies monetization order within three months. The deadline is March 2017, and by no means October,” Aliona Babak says.

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