"Billions will be allocated for payouts," says the Deputy Minister of Economy regarding Zelensky's thousand, the national cashback program, and the EU's strong interest.

In Ukraine, the state National Cashback program has been in effect for nearly three months now. Currently, around 1,500 manufacturers offering approximately 300,000 products have joined the initiative. Soon, citizens can expect another incentive from the central authorities — payments of one thousand hryvnias.

Nadezhda Bigun, Deputy Minister of Economy, shared some details and nuances of these initiatives for citizens in an interview with "Telegraf".

In the first part of the interview with the official, discussions included the technical and financial aspects of the "National Cashback," whether the "money printer" would be involved in distributing the "Zelensky thousands," and one fundamental systemic requirement from the EU to Ukraine.

You can watch the full video of the conversation with Nadezhda Bigun on our YouTube channel.

— Last week, the Ministry of Economy reported on the payments under the program "National Cashback". Can you clarify the current state of this program, is it gaining momentum, and why did only one-fifth of Ukrainians use the September funds?

— The program operates in such a way that people who purchase Ukrainian-made products at participating retail outlets within a month receive a cashback of 10% (of the purchase price. — Ed.). Then, in the following month, around the 20th, we process the payment of these funds.

So far, we have made payments for September and October. In September, about 650,000 people received a total of 37 million hryvnias for the first month of autumn. We have now completed payments for October. Last month, 1.2 million consumers received cashback, totaling approximately 119 million hryvnias. In October, the average payment amount per person increased from 57 to 97 hryvnias. Some individuals, of course, received more. There were citizens who received up to 3,000 UAH (this is the maximum cashback limit).

— And how many of these lucky individuals were there?

— There were 5 out of the total 650,000 citizens [in September]. That's not many. Indeed, there were consumers who purchased a large number of items or expensive goods. Accordingly, they received the maximum amount.

The main reason why money is not being utilized currently is that the accrued amount for September is small in most cases. With this amount, it is currently impossible to fully pay for utilities (or selected services).

Consequently, we have seen that about 25% of these 650,000 citizens utilized their funds. But the rest did not. More representative information will be available after the October payments. These individuals will see an increase in their funds (to the unused amount). Then we will understand how they spend this money.

— Why did the officials focus exclusively on purchasing services with this cashback, rather than products, to allow for payments in stores for groceries and so forth?

— In fact, the National Cashback is a very complex technological product.

— Why?

— First: this program has attracted a large number of participants: banks, payment systems, retailers, manufacturers, the Ministry of Economy, the Ministry of Digital Transformation, "Diya," etc. When we began developing this program, we analyzed various scenarios for how it could operate.

The adopted scenario was the most optimal from an implementation standpoint. It requires that retail outlets configure their cash register equipment to transmit information about the receipts in such a way that they include the product's barcode.

These fiscal receipts are then transmitted to the tax authorities through the RRO. The tax authorities, via information exchange, forward them to "Diya." "Diya" has an information exchange with the banks participating in the program and receives transaction data from cards based on key criteria (transaction date, seller category code, and a whole set of characteristics). "Diya" correlates these two lists to determine who should receive cashback. It verifies that a specific fiscal receipt corresponds to that transaction, and thus, that individual is eligible for a payout. "Diya" checks the barcodes from the fiscal receipt against our database. When it confirms that these products are on our list and are of Ukrainian production, it applies the 10% cashback.

This is indeed a very non-trivial task. Therefore, we spent all of September testing this system, ensuring that everything was correctly configured. For a person to receive cashback and spend it on Ukrainian-made products (in stores. — Ed.), the system needs to be even more complex.

Thus, at the time of the program's launch, we decided that it would be quicker and simpler to initially allow these funds to be used only for services. Moreover, focusing on acquiring services is actually correct in terms of balance.

This additional budget that people receive as an incentive to purchase Ukrainian goods will go towards services and will not affect, for instance, any potential shortages of goods (or price increases), nor will it overheat that part of the economy.

We are essentially stimulating two parts of the economy – goods and services – to create additional incentives in the services segment. After all, services also suffer during the war, blackouts, etc. Therefore, this market also greatly needs an additional cash flow to encourage higher consumption.

About the "Zelensky Thousand"

— When will citizens begin receiving 1,000 UAH, and how can these funds be accessed? Will it be cash?

— The "Winter eSupport" program will start on December 1. These funds can be ordered through "Diya," and they will be credited to the National Cashback card.

As you know, this is an initiative from the President of Ukraine, and he wanted us to find a solution so that these funds could be used not only for services but also for medications. This was one of the conditions we discussed from the very beginning.

Under the "Winter eSupport" terms, funds will be credited to the National Cashback card. Therefore, it will not be possible to distinguish on the card whether these are funds from cashback or the additional thousand.

Both the National Cashback funds and the additional winter support can be used for medications at pharmacies and for books, but only those of Ukrainian production.

We are currently working with pharmacies and book retailers to develop the appropriate technical solution. They will need to configure their cash register equipment to verify at the point of sale whether the product (for which the individual is paying with the National Cashback card) is on our list of Ukrainian products.

Additionally, pensioners and individuals with disabilities will be able to receive assistance from the state through Ukrposhta. The postal worker will inform them about the possibility of receiving the payment when delivering pensions or social assistance. Pensioners and individuals with disabilities will have the option to pay for utilities or purchase Ukrainian-made products.

— What is the total amount allocated for these thousand hryvnias?

— The program will be funded from the leftover unused funds of the non-military state budget. This will be approximately 6 billion UAH. We have a forecast for the calculations [for payments]. We used the data from the "COVID thousands" payments. At that time, over 8 million people received funds. Accordingly, we understand that the population was larger then and is now smaller. We are basing our estimates on these figures, anticipating that a similar number of people will apply through "Diya" to receive the payment.

No one can provide you with a definitive forecast here. Because even with the National Cashback, we expected that this program would progress faster, with more people purchasing [Ukrainian goods], etc. So we allocated 3 billion UAH for the National Cashback this year. But I repeat, the total amount paid in the first month was 37 million UAH for 650,000 Ukrainians. In other words, we didn't even utilize a billion hryvnias. In October, 1.22 million citizens received 119 million UAH in cashback.

Consequently, part of this remainder will also go towards "Winter eSupport."

— Hypothetically, even if 10 billion UAH is allocated for the payments of 1 thousand UAH, this will not overheat the economy or burden the state budget in any way?

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