Important Draft Laws. Issue 22: Increasing Military Levy, Revoking State Awards, and Supporting Small Ethnic Groups in the Russian Federation in Their Pursuit of Independence

During this period, 25 bills were registered: two from the President, eight from the Cabinet of Ministers, and 15 from people’s deputies. Both presidential bills propose establishing legal grounds for revoking state awards (titles such as Hero of Ukraine, merits to the state or in various fields, orders, medals, etc.), which would lead to the loss of social benefits for such individuals. Read about these and other bills further in the review.

Strengthening the powers of the Public Council under the Asset Recovery and Management Agency (ARMA)

The government bill 11397 aims to expand the powers of the Public Council under ARMA. 

Currently, the Public Council can delegate two representatives to the selection committee to fill vacant positions in ARMA. After passing the bill, the committee must consist of at least 40% of Public Council members. A similar provision would apply to the disciplinary committee. 

Additionally, it is proposed that the Public Council be granted the ability to select members from its ranks to participate in appointing asset managers and delegating representatives to the commission meetings on asset realization. 

Representatives of the Public Council would be given the right to assess the effectiveness of managing seized assets. Furthermore, the Public Council would be able to receive information about the agency’s activities and provide feedback on the agency’s annual activity reports. 

The bill also proposes that, in addition to publishing annual reports on its activities, ARMA should publicly disclose the results of audits on other agencies’ effectiveness of asset management. 

The proposed changes are part of the State Anti-Corruption Program (SACP) for 2023-2025, which aims to enhance ARMA’s efficiency. 

Increase in military levy and the “sugar tax”

Bill No. 11416 proposes raising taxes to increase budget revenue. This is necessary to finance the defense sector.

One of the key innovations is increasing the military levy rate for Ukrainians from 1.5% to 5%. Additionally, the proposal suggests that the military levy would be applied to: 

• Legal entities and individual entrepreneurs (IEs) in the third group of the simplified taxation system (single tax of 5% of turnover): 1% of income.
• IEs who are single taxpayers in groups I, II, and IV: 10% of the monthly minimum wage (UAH 800 as of July 2024).
• Buyers of bank metals: 5% of the value of the metals.
• Legal entities and IEs retailing gold, platinum, and precious stones: 30% of their value.
• Individuals and enterprises purchasing, receiving as gifts, or inheriting passenger cars: 15% of the car’s value (excluding cars provided to persons with disabilities according to the law).
• Individuals selling real estate: 5% of the income from the sale.
• Mobile communication operators: 5% of the cost of mobile communication services.

Additionally, the bill includes the following proposals: 

• Enterprises selling fuel must pay an advance of 0.5 minimum wage (UAH 4,000) for each cubic meter of storage tanks for fuel as part of the profit tax payment.
• Establish an excise tax on sugary drinks at EUR 0.1 (approximately UAH 4.5 as of July 2024) per liter of beverage.
• Reduce the duty-free limit for international postal shipments from EUR 150 to EUR 45, applicable only for shipments from individuals.

According to government estimates, the proposed measures would allow an additional UAH 125 billion to be raised for the budget this year. 

In addition, the Cabinet of Ministers proposes obliging taxpayers to conduct an inventory of assets and cash upon the request of the controlling body (State Tax Service) during inspections. Inspectors would have the right to be present during the inventory (currently, inventories can be conducted without their involvement). If taxpayers refuse to allow tax officials to participate in the inventory, their assets may be seized. 

The government proposes new rules for calculating personal income tax (PIT): during martial law, local authorities would be given the right to set the minimum base for calculating PIT within their communities, but not less than the minimum wage. This would close the “loophole” where employers pay employees less than the minimum wage (for example, hiring them part-time) to reduce the taxable base for PIT. This provision would not apply to institutions funded by the state budget, municipal enterprises, and enterprises and public organizations for persons with disabilities (provided that 50% of employees are persons with disabilities and their wage fund is at least 25% of the total payroll expenses).

Permission to revoke state awards

Recently, the President submitted two bills to the Verkhovna Rada of Ukraine — 11410 and 11411 — regarding the procedure for revoking state awards. These bills propose amendments to the Criminal Code, Criminal Procedure Code, Criminal Executive Code, and the Law on State Awards of Ukraine.

The first bill proposes an additional punishment by revoking a state award of Ukraine. This could apply to individuals convicted of serious or particularly serious crimes and offenses against national security and international order. Individuals who have fallen under sanctions by the National Security and Defense Council (NSDC) could also be stripped of their awards. This expands the grounds for revoking awards for criminal offenses and supporting the aggressor state.

It is proposed that the procedure for implementing this decision be detailed. This would ensure a clear mechanism for executing the court’s decision and avoid legal conflicts.

The second bill stipulates that a person deprived of the title “Hero of Ukraine” will lose the right to tax and social benefits. 

Adopting these bills will increase accountability for serious crimes and contribute to a more rigorous selection of candidates for state awards.

Engaging foreigners in the labor market

Bill 11405 aims to create favorable conditions for foreigners who wish to work and study in our country. It:

• Introduces a single permit for employment and residence in Ukraine. If a foreigner lost their job, they would not lose their right to reside in the country. The residence permit would remain valid for six months for job searching.
• Extends the period a foreigner must arrive in Ukraine and sign an employment contract from 90 to 180 days. This provides more time for adaptation and preparation for work in Ukraine.

The bill’s authors also propose abolishing work permits for EU citizens, foreigners seeking protection, and foreigners who have studied at Ukrainian universities. The latter would be able to find employment within nine months after graduation. This would increase the attractiveness of the Ukrainian labor market and promote Ukraine’s integration into the European economic space.

Additionally, the bill requires the employment service to compile a list of vacancies that have remained unfilled for over a year and could be filled by foreign workers. 

New approaches to distributing aid to families of service members

Bill No. 11407 proposes improvements to the social protection of relatives of military personnel who have been captured or gone missing. A service member would have the right to issue written instructions specifying who would receive their financial support in the event of capture or disappearance. This innovation significantly increases flexibility and ensures that the personal wishes of the service members are respected. Previously, such options did not exist, and payments were made exclusively to family members in a strictly defined order (first to the spouse, if absent, then to minor children and their guardians, and if absent, to parents, brothers, and sisters in equal parts). After adopting the law, the support recipient can also be a non-relative.

According to the bill, the person specified in the service member’s personal instruction would receive all payments.

If the service member has not issued a personal instruction, the financial support would be paid to the spouse, legal representatives of minor children, and parents in equal shares. Without these individuals, payments would be made to adult children, siblings, and sisters in equal shares, with the total amount not exceeding 20% of the service member’s financial support. This last provision requires clarification, as it is unclear where the remaining 80% of the financial support goes and how it is distributed: whether it remains in the military unit accounts, the service member’s accounts, or special state accounts.

Another important innovation is the inclusion of unpaid amounts of financial support in the estate in the event of a service member’s death.

As before, the law would not apply to service members who voluntarily surrendered, left their units without permission, or deserted. 

Support for national movements of the colonial peoples of the Russian Federation

Bill 11402 affirms Ukraine’s commitment to supporting the realization of the political, economic, and cultural rights of the colonial peoples of the Russian Federation and their aspirations for independence. The bill is a framework document, and its provisions include:

• Supporting the institutional development of colonial peoples’ national movements. This includes material, technical, and advisory assistance to strengthen their organizational structures (such as forming national or regional representative bodies), developing strategies (conducting training programs and consultations on public administration), and conducting public campaigns (for the protection of human rights and the rights of colonial peoples).
• Coordinating interactions with representative centers to achieve common goals and enhance the effectiveness of their activities on the international stage.
• Ukraine’s actions aimed to include representatives of colonial peoples in international negotiations and forums where their future was decided (conducting diplomatic initiatives and participating in international conferences and forums).
• Supporting the development of national cultures and languages of the colonial peoples, preserving and promoting cultural heritage, and supporting educational programs and projects aimed at the revival and development of these peoples’ national languages and cultures.

These tasks are distributed among Ukrainian ministries, including the Ministry of Foreign Affairs, the Ministry of Culture, and the Ministry of Education and Science. Additionally, the project stipulates that the Ministry of Defense of Ukraine would coordinate the creation of military formations composed of representatives of the colonial peoples of the Russian Federation within the Ukrainian Defense Forces and prepare the foundations for a resistance movement in their territories. These formations would consist of volunteers of the respective nationalities and prisoners of war who have refused to return to Russia and are ready to engage in armed struggle against the colonial regime.