Refund program for Ukrainians: OP explained how everything will work

It is expected that a national refund will be launched in Ukraine under the “Buy Ukraine” project by the end of 2024. Now the cash refund project is under development, and in the meantime, a preliminary plan is known on how exactly funds will be provided to Ukrainians for the purchase of domestic goods. Forbes wrote about this on February 28.

As explained by Daria Zarivnaya, advisor to the head of the Presidential Office, the preliminary mechanism will be similar to the mechanism on the ePidtrimka card. That is, a virtual card will appear in the bank and citizens will be able to spend money only on goods produced in Ukraine.

The main issue that needs to be solved in order to implement the program is financing. Since there is already a deficit in the budget, due to which the government spends money on the army and social payments, Ukraine may try to attract international assistance for the implementation of the program. Meeting the additional needs of the state budget by printing money may be an undesirable option, but this will mean an increase in the money supply, which will accelerate inflation.

At the same time, the senior economist of the Yuri Gaidai Center for Economic Strategy noted that cash refunds, in theory, can actually increase tax revenues in the budget, promote import substitution and, accordingly, improve the balance of payments situation. Then the pressure on the hryvnia and gold and foreign exchange reserves will decrease.

Moreover, as the government expects, the “Buy Ukraine” program will encourage the public to purchase domestic goods. In general, the program concept consists of several levels:

• The first is the demand from the state through localization;
• second, the purchase of Ukrainian goods by international donors;
• The third is to stimulate commercial demand.

Program “Buy in Ukrainian” – details

as i wrote FocusOn February 27, President Vladimir Zelensky announced the launch of the “Buy Ukraine” national refund program in Ukraine. Therefore, the Cabinet of Ministers and the Presidential Office demand that Ukrainians return part of the funds spent on the purchase of domestic goods.

At the same time, Elena Shulyak, head of the committee on the organization of state power, local government, regional development and urban planning, said that the cashback program is currently in the development stage – financial and technical parameters are being prepared. According to him, the Government plans to launch the “Buy Ukraine” program before the end of 2024, as it will allow Ukrainian money to remain in the country.

Experts have previously explained how the cash refund program could have a positive impact on the Ukrainian economy. Thus, with the right approach, an additional contribution of approximately 60 billion dollars to the state budget is expected.