KYIV. Dec 21 (Interfax-Ukraine) – Ukraine’s Verkhovna Rada has revoked 2% pension tax imposed on cash currency purchase transactions.
The requirement is outlined in bill No. 5132 amending the Tax Code to provide for the balance of budget revenue in 2017. The bill on the national budget for 2017 was adopted by 235 lawmakers in early hours of Wednesday, December 21.
The amendments were made to the law on the obligatory state pension insurance tax.
As reported, on November 1, 2016, bill No. 4741 on amendments to the Budget Code on ways to pull forex operations out of the shadows passed its first reading due to the support of 247 MPs.
Tax on forex operations for the first time was introduced in 1998 as a temporary anti-crisis measure. Its rate was 1.5% before 2006. It was then lowered to 1.3% and was cut to 1% in 2007, 0.5% in 2008 and further to 0.2% in 2009.
In January 2011, the Rada cancelled pension tax on forex transactions, but in 2014 it set the rate at 0.5% again.
From 2015, it was increased from 0.5% to 2%, but it is applied to purchases of foreign currency in cash with legal entities being exempt from this tax.
The initiators of the bill said that Ukraine’s shadow market exceeded 50%, which creates the additional pressure on the hryvnia and hampers the operations of the forex market in the country. The National Bank of Ukraine (NBU) and international financial institutions (IFIs) backed the idea.
The second Ukrainian-Lithuanian forum, held in Kyiv with the participation of the Presidents of Ukraine and Lithuania, members of the governments, business associations, businesses, has strengthened a pragmatic component in bilateral economic cooperation. Over 320 entrepreneurs from both countries have managed to agree on a joint action plan to strengthen cooperation and contacts between Ukrainian and Lithuanian companies. What is more, a number of agreements, namely on interaction in the IT sector, organization of exhibitions, and other issues have been signed.
In particular, the participants in the event discussed investment cooperation, advantages and peculiarities of doing business in the markets of Ukraine and Lithuania, the possibility of setting up joint ventures, cooperation in free economic zones and industrial parks in Lithuania.
As President of the Ukrainian League of Industrialists and Entrepreneurs (ULIE) Anatoliy Kinakh has said, the forum has a very clear task – to considerably develop business relations, as the economic potential of both Ukraine and Lithuania is much higher than foreign trade figures demonstrate.
“Our contacts are systematic in nature: we’ve implemented a number of projects, conducted business forums and meetings. The business councils we’ve created together with the Lithuanian Confederation of Industrialists work on a regular basis. As many as 250 companies with Lithuanian capital work in Ukraine now. The largest Lithuanian companies, representatives of big corporations that show particular interest in privatization in Ukraine are also present here today. They may become investors in Ukrainian ports and agri-businesses, for instance,” he said.
The ULIE has been implementing a number of projects with the Lithuanian side, namely a project for the use of specialized lasers, the creation of water treatment systems, reconstruction of infrastructure in small towns, the development of small- and medium-sized enterprises, energy efficiency and so on.
The parties also agreed on the training of Ukrainian specialists in Lithuania. What is more, Lithuanian partners are particularly interested in Ukrainian information technology, agriculture, construction, architecture, etc.
Traditionally, the forum enjoys high status, as it was attended by President of Ukraine Petro Poroshenko and President of Lithuania Dalia Grybauskaite for the second consecutive year. They confirmed the readiness to significantly strengthen economic and cultural ties. Grybauskaite in particular stressed Ukraine needs to do its own “homework:” root out corruption, boost corporate social responsibility, and establish dialogue within the “government-business-society” triangle.
The second Ukrainian-Lithuanian forum was organized by the ULIE, the Lithuanian Confederation of Industrialists, the Chambers of Commerce and Industry from both countries and the Chambers of Commerce and Industry of Vilnius and Kyiv. Traditionally, this event is attended not only by members of the business community, but also by the heads of state, government officials and experts.
The Ukrainian Railways (Ukrzaliznytsia), which is in a plight at the moment, may get an opportunity to upgrade 80-90% of its old rolling stock by engaging Ukrainian-based machine-building enterprises. This initiative put forth by the business community – the Anti-Crisis Council of NGOs, the Ukrainian League of Industrialists and Entrepreneurs (ULIE), a number of professional associations – was supported at a visiting session of the National Committee for Industrial Development in the town of Kremenchuk. The event was attended by Ukrainian Prime Minister Volodymyr Groysman, Minister of Economic Development and Trade Stepan Kubiv, as well as other ministers, ULIE leaders, top managers of Ukrzaliznytsia, Kriukov railway car building works, Azovmash, and others.
Having visited the works and examined its problems, Committee members agreed to draw up a state program until 2021 for the procurement of new rolling stock for Ukrzaliznytsia. It is scheduled to be approved as early as in the first quarter of 2017.
“Thus, the initiative of the Ukrainian industrialists and entrepreneurs has been heard. The state has an opportunity to introduce concrete mechanisms to support domestic enterprises in the machine-building sector and maintain jobs for skilled workers, streamlining rail transport operations. Further ignoring these problems could translate into a complete loss of personnel, technological capabilities, and lead to a halt to the whole industry,” member of the Committee, ULIE President Anatoliy Kinakh has said.
The ULIE and business associations have repeatedly pointed to the critical situation in transportation by rail. The lack of freight cars has jeopardized key domestic industries. Losses for producers and exporters reach $70-80 million each month. Thousands of tonnes of freight lay idle each day.
For example, transport operations in the mining and metallurgical complex have fallen by almost 10%, which resulted in a reduction of steel production by at least 200,000 tonnes and a decline in the country’s foreign currency revenues by $70 million per month.
At the same time, manufacturers of transport equipment also sustain significant losses. For example, Kriukov railway car building works saw a decline in production by 85.7% compared to 2011, and its workforce more than halved.
Further, Anatoliy Kinakh announced a number of meetings scheduled between the Economic Development and Trade Ministry and representatives of metallurgical and machine-building enterprises on the principles of setting prices for their products in the domestic market.
Producers are also set to export their produce. In particular, on the agenda are talks with representatives of trade missions and embassies of the countries that are interested in Ukrainian-made products.
KYIV. Dec 20 (Interfax-Ukraine) – President of Ukraine Petro Poroshenko reckons upon further development of economic cooperation between Ukraine and Saudi Arabia, in particular in the aircraft industry.
“Another feature of the creation of the AN-132D aircraft is that it is truly an international project, and I sincerely thank our partners and customers from the Kingdom of Saudi Arabia for full participation in its implementation. I am confident that our project will be the first of many joint business projects between our countries,” he said during a solemn ceremony marking the creation of the AN-132D aircraft in Kyiv on Tuesday.
The Ukrainian president noted that cooperation between Ukraine and Saudi Arabia has a great potential.
According to him, Canada, the U.S., Great Britain, Germany, France and other countries assisted in the creation of the AN-132D aircraft.
KYIV. Dec 20 (Interfax-Ukraine) – Ukraine has agreed with the European Investment Bank (EIB) on raising a loan of EUR 30 million for the project “Higher Education. Energy Efficiency and Sustainable Development.”
The relevant agreement was signed in Brussels on Monday, the Ukrainian Economic Development and Trade Ministry of Ukraine wrote on Twitter.
Ukrainian Deputy Minister of Education and Science Roman Hreba said earlier they already identified seven universities that will participate in the first stage of the project and soon will announce a tender to choose universities for the project’s second stage.
The project is designed for five years.
KYIV. Dec 20 (Interfax-Ukraine) – The European Investment Bank (EIB) has agreed on financing for the projects of Ukrainian grain market operators to expand and modernize their logistics infrastructure.
According to the bank’s website, the board of directors made the decision on December 14 this year.
It is expected that the project will eliminate the existing bottlenecks associated with grain transportation and storage, reduce the cost of transportation by road, as well as increase the annual volume of agricultural products exports, the EIB said.
The bank did not indicate the amount of funds provided for these projects.
