The State Automobile Road Service (Ukravtodor) considers it necessary to return to the system under which roads were financed from a special fund of the state budget of Ukraine and subsequent creation of a protected State Road Fund. The Interfax Ukraine news agency reported this, citing the press service of the Ukravtodor.
Under the state budget for 2015, as well as the recent amendments to the Tax Code and the Budget Code of Ukraine, the sources for financing the road sector, which were previously accumulated in a special fund of the state budget, have been abolished and the financing of the road sector has been switched to the general fund.
"This format does not provide an understanding of the amount of funds that will be allocated for the following year and, therefore, makes long-term planning that takes the future into account impossible," Ukravtodor’s head Serhii Pidhainyi is quoted as saying.
In addition, according to him, funding for the road sector is now provided after the requirements of the other sectors of the economy that have protected articles or dedicated sources of funding in the special fund of the state budget are met - at the end of the month, as a rule.
"Because of this, contractors perform work and purchase materials on credit and taxes are paid late, resulting in fines and penalties. Added to the rapid currency fluctuations that affect the pricing for these work and materials, this creates an additional financial strain in the industry," said Pidhainyi.
According to him, the issue decentralization of financing also remains unresolved because subventions for the preservation and development of the municipal road network have been canceled. Instead, a new excise tax of 5% on retail sales of excisable goods - petroleum products and other fuels - has been introduced, and revenues from this tax are generated into the general funds of local budgets.
Speaking about the need for a road fund, Pidhainyi said that revenues from target sources of funding - such as excise taxes, duties, road tolls, fees for use of roadside services, etc. - should be accumulated into this road fund and that related amendments to the law will allow better control of budget revenues and their rational use.