2017年-世界发展银行全球_Ukraine_Public_Finance_Review_104页_4mb

Ukraine Public Finance Review Summary (June 27, 2017)

Core Content

This document presents a comprehensive analysis of Ukraine's public finance situation and outlines key reform options to restore fiscal sustainability and improve the delivery of public services. It covers several critical areas including fiscal policy, tax reform, pension system sustainability, healthcare financing, education optimization, and decentralization.

Main Points

Fiscal Sustainability

• Fiscal Challenges: Ukraine's public sector remains large, public debt is high, and inefficient public service provision hampers growth potential.
• Recent Progress: Fiscal consolidation efforts have reduced the general government (GG) deficit from over 10% of GDP in 2014 to 2.2% in 2016, aided by inflation, exchange rate depreciation, and energy tariff reforms.
• Ongoing Pressures: The deficit is expected to rise to 3.1% in 2017 due to increased minimum wages and potential pension benefit increases. The public debt-to-GDP ratio has increased to 89% in 2016, with a high share of foreign exchange (FX) obligations and interest payments.
• Risk of Unsustainability: Structural weaknesses in the pension system and slow growth recovery pose risks to long-term fiscal sustainability.

Tax Reform

• Current Tax System: Ukraine's tax system is complex, inequitable, and plagued by exemptions and inefficiencies.
• Tax-to-GDP Ratio: Despite a high tax-to-GDP ratio, tax compliance and base broadening remain areas for improvement.
• Reform Focus: The review recommends broadening the tax base, improving tax administration, and closing loopholes.
• Key Measures:
  • Eliminating tax exemptions (e.g., printing services, pharmaceuticals, and medical equipment).
  • Revising international double taxation treaties (DTTs) to prevent profit shifting and improve international competitiveness.
  • Increasing cigarette excise taxes to boost revenue and improve public health outcomes.

Pension Reform

• Pension System Issues: The system is unsustainable due to population aging and high replacement rates.
• Current Deficit: The Pension Fund of Ukraine (PFU) deficit is significant, and structural reforms are necessary to address long-term fiscal vulnerabilities.
• Reform Options:
  • Structural changes to align with modern systems.
  • Parametric adjustments to reduce fiscal pressures.
  • Reforms to ensure better targeting and efficiency of pension benefits.

Healthcare Financing

• Health Outcomes: Despite a large healthcare infrastructure, health outcomes remain poor.
• Spending Trends: Healthcare spending is high but inefficient, with a significant share going to non-communicable diseases (NCDs).
• Reform Options:
  • Improving efficiency and equity in public healthcare spending.
  • Enhancing the quality of services through better resource allocation and management.
  • Reducing the burden on the public sector through cost-effective service delivery.

Education Optimization

• Education Spending: A large portion of education spending is recurrent, with limited investment in capital.
• Performance Variations: Subnational variations in student performance indicate inefficiencies in resource use.
• Reform Options:
  • School grouping and amalgamation to improve efficiency.
  • Better targeting of resources to urban and rural areas.
  • Enhancing the quality of education through improved teacher salaries and infrastructure.

Decentralization

• Current Structure: Ukraine's public sector spending is highly centralized, leading to inefficiencies in service delivery.
• Decentralization Potential: Amalgamation of local communities and improved subnational governance could enhance service delivery and fiscal accountability.
• Reform Options:
  • Strengthening the capacity of subnational governments (SSC).
  • Reforming the transfer system to improve accountability and efficiency.
  • Encouraging more fiscal autonomy for local authorities.

Key Information

• Exchange Rate: 1 USD = Hryvnia 26.48 (as of May 15, 2017).
• Fiscal Year: January 1 to December 31.
• Key Institutions:
  • World Bank Task Team Leaders: Karlis Smits and Anastasia Golovach.
  • Regional Vice President: Cyril E Muller.
  • Country Director: Satu Kähkonen.
• Document Structure:
  • Overview
  • Chapters on fiscal reforms, tax administration, pension reform, healthcare, education, and decentralization.
  • Figures and tables analyzing fiscal operations, tax-to-GDP ratios, healthcare spending, education statistics, and social assistance programs.
• Targeted Reforms:
  • Broadening tax base and improving tax compliance.
  • Structural changes in the pension system.
  • Enhancing healthcare and education efficiency.
  • Accelerating decentralization to improve local governance and service delivery.

Summary of Reform Options

• Tax Reform:

  • Broaden the tax base by eliminating exemptions.
  • Improve tax administration and reduce corruption.
  • Renegotiate international DTTs to prevent profit shifting.
  • Increase excise taxes on tobacco to improve revenue and public health.

• Pension Reform:

  • Implement structural changes to ensure long-term sustainability.
  • Adjust parametric factors such as contribution rates and benefit levels.
  • Better target pension benefits to those in need.

• Healthcare Reform:

  • Improve the efficiency and quality of healthcare services.
  • Reduce the burden on the public sector by enhancing private sector participation.
  • Focus on preventive care and public health outcomes.

• Education Reform:

  • Optimize the school network through amalgamation and restructuring.
  • Allocate resources more efficiently and equitably.
  • Improve teacher salaries and educational outcomes.

• Decentralization Reform:

  • Shift more responsibilities to subnational governments.
  • Enhance accountability and service delivery through better transfer systems.
  • Strengthen local governance and financial autonomy.

Conclusion

The Public Finance Review emphasizes the need for comprehensive and sustainable reforms across various public sectors. These reforms are crucial to restoring fiscal sustainability, improving public service delivery, and enhancing Ukraine's long-term economic prospects. The document provides detailed analysis and actionable options to address current fiscal and service delivery challenges.