Business news from Ukraine

FINANCE MINISTRY PRELIMINARILY ASSESSES ANNUAL BUDGET REVENUE FROM LEGALIZATION OF GAMBLING AT UAH 5 BLN

KYIV. Sept 1 (Interfax-Ukraine) – The Finance Ministry of Ukraine has preliminarily assessed revenues of the national budget from the legalization of gambling at up to UAH 5 billion, Finance Minister Natalie Jaresko told reporters on Monday.

“According to tentative assessments, this could be up to UAH 5 billion a year of revenues to the budget. Concrete figures would be presented in the budget,” she said.

As reported, Economic Development and Trade Minister of Ukraine Aivaras Abromavicius has said that he supports the legalization of gambling in the country.

“I personally support [legalization of] gambling, as it means income for the budget,” he said.

According to him, such establishments should be located in four and five-star hotels and the exact size of such establishments should be defined in a way that operators with good reputations from the U.S. and Central and Eastern Europe will come to Ukraine.

The Finance Ministry plans to reduce the individual income tax and single social security tax thanks to the legalization of gambling.

Gambling was banned in Ukraine in the summer of 2009.

AT LEAST 25 SIGNATURES TO BE COLLECTED IN THREE MONTHS FOR CONSIDERATION OF E-PETITIONS BY PRESIDENT – OFFICIAL

KYIV. Aug 31 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko has approved the procedure for considering electronic petitions submitted to the president, which will be a real mechanism for direct communication between the public and the president, Deputy Head of the Presidential Administration of Ukraine Dmitry Shymkiv has said.

“Petitions are the real mechanism of direct addresses of the public to the president. This is the initiative of Poroshenko, which first was realized in the adoption of the law on amending the law on petitions of citizens in the electronic form and electronic petitions, which the head of state signed a month ago, and now it is transformed in his decree,” Shymkiv said, commenting on the signing of the document, the press service of the head of state reported.

According to the decree, under the law on the petitions of citizens, electronic petitions will be submitted to the president with at least 25,000 signatures collected no more than three months from the date of its publication.

“The petitions will be discussed urgently, but no later than 10 working days from the moment of the publication of information on the start of its consideration. The Presidential Administration is provided for the consideration of the petitions,” the report said.

A working group will be created to consider the petition with the involvement of representatives of the interested agencies, and if required – representatives of civil society, experts, specialists, advisory and other auxiliary agencies and services, the report said.

If the issues raised in a petition touch not only powers of the Ukrainian president, but also other agencies, the relevant agencies will be involved in working on the petitions.

The draft president’s response will be formed within seven days from the day of the publication of information pm the consideration of the petition. Then it is to be submitted to the president.

The notification on support or non-support of the electronic petition by the head of state will be posted on the website of the Ukrainian president and his response will be posted in a dedicated section.

UKRAINIAN PARLIAMENT PASSES CONSTITUTIONAL AMENDMENTS ON DECENTRALIZATION AT FIRST READING

KYIV. Aug 31 (Interfax-Ukraine) – The Verkhovna Rada has passed the presidential bill on amendments to the Constitution of Ukraine on decentralization at first reading.

A draft resolution on the preliminary approval of the bill was supported by

265 out of the 368 MPs present in the session hall on Monday.

Verkhovna Rada Speaker Volodymyr Groysman closed the parliamentary session immediately after the resolution was adopted.

As reported, the adoption of constitutional amendments is envisaged in the Minsk agreements. Ukrainian President Petro Poroshenko put forward a bill on amending the constitution which foresees that the special procedure of local government in some areas of Donetsk and Luhansk regions is to be defined by a separate law.

In the current session, which was not closed in July, the parliament needed

226 votes to pass the bill at first reading. Now, the Verkhovna Rada needs at least 300 votes for the final adoption of the bill on amendments to the constitution during the next session.

EBRD SUPPORTS UKRAINIAN GOVERNMENT’S NEW APPROACH TO PRIVATIZATION, DISCUSSES PROVISION OF TECHNICAL AID

KYIV. Aug 31 (Interfax-Ukraine) – The European Bank of Reconstruction and Development (EBRD) supports the new approach of the Ukrainian government towards the privatization of state-owned facilities and continues to discuss the provision of technical help on the issue, EBRD Director in Ukraine Sevki Acuner told Interfax-Ukraine.

“We consider the new approach more sensible and wise. The privatization must be conducted in a transparent way by giving the potential investors time for due diligence: If the sale was conducted in the old way, by putting 5% on the exchange house to determine the price, it wouldn’t allow for a full attraction of investors to the market. Only an insider with inside knowledge could ‘put money on the table.’ The attempt to assess the actual market value of the asset in such a way would be futile,” he said.

According to the agency’s interlocutor, this position is shared by not only the EBRD, but also by international financial organizations working in Ukraine.

Acuner said that the EBRD and other donors are discussing the provision of technical help to Ukraine in two directions: to prepare legal amendments for the privatization under new rules, and in practical issues of privatization.

“We’re looking into the possibility of giving the aid to the State Property Fund to organize and conducting the ‘due diligence,’ pre-privatization analyses, including value assessment, ecological research, legal analyses.

There’s also a possibility of help in reforming the laws needed for the privatization taking the best international experience into account,” Acuner said.

According to him, both the EBRD and USAID are ready to provide significant technical aid to Ukraine to conduct transparent and efficient privatization.

“There will be a discussion next week among international financial organizations working in Ukraine to coordinate the support,” Acuner said.

Acuner also expressed hope that Ukraine would continue to pass progressive reforms.

OVOSTAR SEES 42% RISE IN NET PROFIT IN H1 2015

KYIV. Aug 31 (Interfax-Ukraine) – Ovostar Union, one of the leading producers of eggs and egg goods in Ukraine, saw a 42% rise in net profit in January-June 2015, to $15.893 million, the company said in a report on the Warsaw Stock Exchange (WSE).

The company said that its revenue decreased by 2%, to $33.509 million and gross profit grew by 14%, to $14.231 million.

Operating profit rose by 30%, to $14.864 million and earnings before interest, taxes, depreciation and amortization (EBITDA) – by 18%, to $15.875 million.

The company said that its revenue decreased mainly related to lower revenue from non-core sunflower processing segment. Net profit has been influenced by a non-cash item, finance in-come that arose from translation of the company’s EUR-denominated loans into presentation currency.

Production cost in H1 2015 totaled $20.718 million. Lower year-on-year U.S.

dollar terms cost of grains, the company’s main production cost component, resulted in a 12% decrease in cost of sales value, although selling volumes have been higher than in the H1 2014.

Devaluation of Ukrainian hryvnia that continued in the first half of 2015 compressed the U.S. dollar value of the company’s balance sheet items. In H1

2015 the USD-denominated value of total assets decreased by 6% to $95.062 million compared to the end of 2014. Current assets decreased by 3% to

$32.368 million while non-current assets decreased by 8% to $62.694 million.

During the reporting period, total liabilities increased by 12% to $18.554 million. Trade payables de-creased by 54% to $2.622 million.

TOP PRIORITIES OF FINANCE MINISTRY ARE TAX REFORM, BUDGET DECENTRALIZATION, GROWTH OF BUDGET REVENUES – MINISTER

KYIV. Aug 31 (Interfax-Ukraine) – The tax reform is a top-priority in the current work of the Finance Ministry of Ukraine, Minister Natalie Jaresko has said, reporting on the work of the Cabinet of Ministers last week.

“Demilitarization of the tax police and institutional restructuring of the State Fiscal Service would make tax administration easier and reduce the pressure on responsible and fair businesses,” she said.

She added that tax amendments should stimulate economic growth and change taxation culture in general.

The quick introduction of all international projects that improve infrastructure and create additional jobs is one more top-priority of the ministry.

Jaresko said that among important tasks is the deepening of budget decentralization, increase of budget revenues thanks to fight against smuggling, bringing business out of the shadows, improvement of tax payments, reform of state enterprises, fight against budget infringements and the acceleration of seizure of assets of Yanukovych regime’s officials.

Commenting on the 2016 national budget, the minister said that it should be effective and parsimonious to finance defense and allow developing, as well as support vulnerable people.

Jaresko also announced the launch of a portal on the use of public funds as a first step of the E-Data project from September. The project would disclose information of the State Treasury and all expenses of the central and local authorities.

Among key achievements during her work on the post of the finance minister in the past nine months was the signing of the new four-year $17.5 billion program with the International Monetary Fund (IMF) supported by an additional financing of $7.2 billion, the realistic 2015 budget, the launch of the real budget decentralization and the agreement on restructuring the country’s commercial foreign debt.