The “Good Financial Governance in Public Finance III” Project is realized on behalf of the German Government by the federal enterprise Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

Good Financial Governance in Public Finance III

Reformed institutions and modern structures create transparency and trust – fostering sustainable development.

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Project name:
Good Financial Governance in Public Finance III
Commissioned by:
Federal Ministry for Economic Cooperation and Development (BMZ)
Partner:
Ministry of Finance of Ukraine
Current term:
2019 to 2022

The “Good Financial Governance ІІІ” Project is realized on behalf of the German Government by the federal enterprise Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

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Objective

Ministry of Finance and Parliament improve the management of public finances. The Court of Auditors controls public finances according to international standards. Taxation is based on the economic performance of taxpayers, and strictly follows the laws of Ukraine. Companies abide by the taxation laws, and tax evasion is made harder.

Challenges

Ukraine has signed an Association Agreement with the European Union and is pushing for economic integration into the EU internal market. The agreement foresees the adoption of EU legal and economic standards. To fulfil its obligations under the agreement, the Ministry of Finance, Parliament and the Court of Auditors will have to modernise their procedures and make them more transparent.

Activities

The project supports change processes in institutions to promote good financial governance. Here the primary focus is to improve structural and legal conditions. The project aims to improve the Ministry of Finance’s management capacities and make progress in harmonisation with EU and international standards in the area of taxation. The project also plans to promote transparency initiatives that were initiated by civil society stakeholders and have since become anchored in public administration. The project supports the supreme audit institution to improve its communication capacities and knowledge management. At the same time, the project involves civil society to push forward and communicate and analyse reforms of public finances in Ukraine.
Furthermore, the project fosters close cooperation with civil society partners to create greater acceptance and trust among the population.

Results

The project builds on the experiences and results of the ‘Support to the reform of public finances in Ukraine’ project and continues the successful work started there.

– The transparency platforms ProZorro, ProZorro.Sale and e-data now have substantially higher user figures and cover considerably more state bodies and budgets. Thanks to the launch of ProZorro as an internet platform for public invitations to tender, the Ukrainian budget has saved EUR 1,600,000,000 in two years. In 2018, the Institute of International Finance ranked Ukraine as the emerging economy that had made the most progress in the areas of data transparency and financial communication.

– The performance capability of Ukraine’s financial system has improved significantly. Thanks to new tax legislation and collection procedures, the World Bank ranked the country as significantly improved when it comes to taxes in 2017. The Ministry of Finance has presented a medium-term financial plan, and the parliament adopted the budgets for 2018 and 2019 on time for the first time.