The Centre for Democracy and Rule of Law, together with the experts from the Ukrainian Center for Independent Political Research, updated the Concept for Introducing Percentage Mechanism in Ukraine, which is being developed within the Ukrainian Civil Society Sectoral Support Activity project. 

The document describes the mechanism of financial support of non-profit organizations, foreign experience of introduction of such mechanism, its advantages, and also contains the list of the basic questions concerning its use in Ukraine.

The Concept for Introducing Percentage Mechanism in Ukraine was updated and supplemented as a result of numerous online meetings, as well as offline meetings held on January 23 and February 19, 2020, which were attended by numerous representatives of civic and international organizations.

Under the Percentage Mechanism (aka Percentage Tax Designations), citizens are given the right to dispose of the statutory percentage of income tax paid to finance selected non-profit organizations.

According to the Concept, personal income taxpayers are asked to give 2% of the already paid development tax to one or two non-governmental organizations. It is envisaged that a citizen will be able to use the mechanism by filling out a special electronic form in the taxpayer account and using the application “Diia”. 

The Concept contains information on which organizations can be recipients of such interest, a list of requirements for such organizations, mechanisms for transferring and receiving funds. The Concept also mentions the need to introduce mandatory financial reporting for organizations, namely reports on the funds they received, and mentions the development of information policy on the mechanism for using such a tool.

In the development of the Concept, we took into account and relied on foreign experience in implementing the percentage mechanism, which has already been successfully implemented in a number of countries: Hungary, Slovakia, Lithuania, Poland, Italy, Romania and Moldova.

See the full text of the Concept for Introducing Percentage Mechanism in Ukraine at the link (in Ukrainian).

If you have any suggestions and comments, or any information needs to be corrected or clarified, please contact us by e-mail: diana.nalyvanna@gmail.com.

The Concept for Introducing Percentage Mechanism in Ukraine is developed by the generous support of the American people through the United States Agency for International Development (USAID) within the Ukraine Civil Society Sectoral Support Activity implemented by Initiative Center to Support Social Action “Ednannia” in partnership with the Ukrainian Center for Independent Political Research (UCIPR) and the Centre for Democracy and Rule of Law (CEDEM).