Project: Development of the Institution of Tax on State and Communal Real Estate Property
The project is aimed at creating legal mechanisms that will incentivize state authorities and local self-government bodies to reconsider approaches to asset management and promote the transfer of surplus property to privatization. The EU-LEAP team conducted analytical work and developed recommendations with the goal of improving the provisions of the Tax Code of Ukraine and contributing to the systematic accounting of state and communal property assets, their effective use, as well as the reduction of administrative costs for maintaining unused property.
Relevance:
State authorities and local self-government bodies are often not interested in transferring unused property on their balance sheets to privatization. The primary reason is the absence of incentives: most such assets generate no costs, and therefore balance holders have no interest in ensuring that such property delivers real social and economic benefits through effective management.
Project goal:
Ensuring fair taxation of state and communal real estate by abolishing the relevant exemption for such assets — with the exception of assets not subject to privatization and assets for which a privatization decision has been made but for no more than 12 months over the last two years — in order to enhance the effectiveness of managing such property and create additional sources of revenue for local budgets.
Project objectives:
Ensuring systematic accounting of state and communal real estate, increasing revenues to local budgets, incentivizing state authorities and local self-government bodies to effectively manage state and communal real estate — in particular through adopting decisions on transferring such property to privatization — as well as ensuring the development of the institution of tax on real estate other than land plots.
Expected results:
Increasing revenues to local budgets from the tax on real estate other than land plots, enhancing the transparency and effectiveness of state and communal property management, strengthening the financial autonomy of local budgets, and accelerating the processes of corporatization of state and municipal enterprises through the contribution of real estate assets to their authorized capital.