This brief article aims to answer several key questions: What is the Law “On Administrative Fee” about, and why does Ukraine need it, and what key issues will likely be debated before its second reading?
What is Draft Law No. 4380 About?
The Draft Law of Ukraine “On Administrative Fee” (reg. no. 4380), submitted to Parliament on 16 November 2020, was only adopted in the first reading on 5 June 2025. Its core objective is to provide additional financial resources, particularly to local self-government bodies (LSGs) and their Administrative Service Centres (ASCs).
This will be achieved by introducing or increasing fees for certain administrative services that are currently free of charge or cost a nominal sum. This concerns a relatively small share of services – around 150 out of the 2,200 officially registered services. These are the most commonly used and essential services over a person’s lifetime and can be considered “basic” services. In fact, they have the potential to become revenue-generating.
In addition to passport and property registration services, the list includes civil registration (RACS), registration of residence, business, land, and several other services (including rural notary functions). Social protection services will, of course, remain free of charge for recipients – as will the issuance of a first ID card and birth registration.
Although the draft was submitted back in 2020, the proposed administrative fees remain largely adequate, ranging from UAH 100 to 300. Naturally, the draft will require updates before its second reading. For reference, a simple calculation of services provided versus resources spent in previous years revealed an average cost of UAH 300 per service.
Other notable provisions of the draft law include:
- A 25% discount for online services
- Free provision of certificates by default (to eliminate incentives to monetise them)
- Higher coefficients for expedited services
- The right to pay in cash at LSGs
The fees for basic services are directly stipulated in the law, following the examples of Poland, Estonia, and the Czech Republic. This is highly relevant for Ukraine, as some executive bodies or their enterprises continue to engage in questionable payment practices (notably in the RACS sector under the Ministry of Justice, and passport services provided by the state enterprise “Document” under the State Migration Service). Clear and transparent fee structures should put an end to these opaque schemes.
What Will Likely Be Debated Ahead of the Second Reading?
1. Should the Law Specify Exact Fee Amounts or Delegate This Power to the Cabinet of Ministers?
There has long been debate over whether fees should be set in the law itself or delegated to the Cabinet of Ministers or other bodies.
However, Article 92 of the Constitution of Ukraine clearly states that taxes and fees must be established by law. Moreover, Ukraine’s existing poor practices underscore the risks of delegating this authority, wherever fees are not legally defined, problems persist.
This is not just a legal issue – it’s also about legitimacy and the social dimension of these payments. Parliament must define the fees for at least basic services. This principle has been enshrined in the Law of Ukraine “On Administrative Services” (Article 11) since 2012. Although implementation has slowed, the policy direction remains clear.
Draft Law No. 4380 offers a potential compromise: while basic service fees are fixed in the law, Parliament may authorise the Cabinet or even LSGs (if ready) to determine fees for other services, within a legally established range.
2. Should Fees Be Set in Absolute Monetary Terms?
In my view, as an expert and citizen, this would be the best option. It’s what we see in the aforementioned countries. It’s more user-friendly and eliminates scope for inventing questionable “consulting” or “information” services. It also affirms respect for the national currency and economic stability.
Still, alternatives are under discussion. One is to use social indicators (e.g. minimum wage or subsistence minimum). A better compromise might be a special unit of account – for example, one “administrative service unit” (ASU) equals UAH 100. Under this model, coefficients defined in the law would result in, say, a UAH 200 fee for a simple registration (2 ASUs), UAH 300–400 for more complex services, and UAH 100 for register extracts. To adjust for inflation or other factors, Parliament would only need to amend the ASU’s value.
For public convenience, the responsible central executive body would be required to publish a single source listing all current administrative fees in absolute terms.
3. How Should Current Fee Amounts Be Determined?
The original draft relied on analogy with property registration fees. This remains a valid approach. The social dimension must also be considered – here, MPs and LSG associations play a vital role.
The Ministry of Digital Transformation has long been working on a formula for calculating the cost of services. A basic methodology adopted by the Cabinet in 2010 is still in use, and is largely adequate with minor updates.
It’s important to calculate the real “cost” of service delivery. This helps ensure fees are fair and not excessive, as administrative services are not commercial transactions – they are exercises of public authority. Therefore, both Parliament and the Cabinet must be guided by sound cost analysis.
Most administrative services are state services, even if delegated to LSGs. Fee amounts should thus be uniform across Ukraine. They must be reasonable, partially compensatory, and based on the service’s social and economic value.
4. What About Resistance from Certain Agencies (Passports and RACS)?
Where blank documents or central authorities are involved, administrative fees should be split accordingly. If only registries are used, then perhaps 15% of the fee should go to the state budget. Where blanks or back-office functions are involved, the share could rise to 30–60%.
To accommodate this, amendments to the Budget Code should be revived. This could win support from government agencies like the Ministry of Internal Affairs, the State Migration Service, StateGeoCadastre, and the Ministry of Justice.
Since 2012, passport-related fees have been meant to include all costs (including blanks) in a single administrative fee, as per Article 11, Part 5 of the Law on Administrative Services. Law 4380 should finally implement this.
In the case of SE “Document”, a workable solution would be to allocate UAH 400–500 (their current fee) as part of the general administrative fee for their front-office services. Fees for services abroad must also be defined by law to end the “grey zone”.
Regarding SE “Document” and “Ukraine Printing Plant”, more oversight is needed – not only from the Antimonopoly Committee but also through parliamentary scrutiny. Ukraine is virtually alone in allowing different prices for passports from different providers, or letting state enterprises dictate service prices to the government.
As for RACS services, the issue is simpler. The Ministry of Justice should be fully budget-funded, not earning income from additional “paid services”. Such practices are unacceptable for a body that should set an example of legality.
Passing Law 4380 could also lead to a much-needed decision, transferring all RACS functions to LSGs.
5. Will There Be Enough Votes for the Second Reading?
The path will be difficult. Populism, bureaucratic resistance, and vested interests will pose challenges. But with growing funding needs for defence, education, healthcare, and more, Ukraine must seek internal revenue sources.
The administrative fee is the most honest way to generate such funds, enabling citizens to cover at least part of the cost of services they use.
Moreover, Ukraine has commitments to the EU – this issue will be closely monitored by partners. The sooner the law is adopted, the better.
Most importantly, we must remember the public: every delay in adopting Law 4380 makes it harder to maintain the quality and accessibility of services. The five-year delay has already cost Ukraine billions of hryvnias.
6. No, ASCs Will Not Receive the Funds Directly
Correct – ASCs will not receive funds directly. The money will go to local budgets (except the portion allocated to central authorities like SMS or the Ministry of Justice). But this is still a resource that LSGs can and should use to support service delivery.
The administrative fee is effectively a compensatory payment for handling individual cases. The use of this revenue is thus not just a question of LSG efficiency – it’s a matter of ensuring the proper and targeted use of additional public resources.
Viktor Tymoshchuk, PhD in Law, Senior Research Fellow at the V. M. Koretsky Institute of State and Law of the National Academy of Sciences of Ukraine, Deputy Chair of the Board of the Centre of Policy and Legal Reform, and expert of the Polaris Programme.
