KYIV. Feb 15 (Interfax-Ukraine) – The Ukrainian League of Industrialists and Entrepreneurs (ULIE) an the Anti-crisis Council of NGOs demand to increase the level of professionalism and responsibility in the public administration area, call on starting the team work of all branches of power jointly with business and society to allow the economy to stably develop.
“We demand that the president and parliament reloads the government. The state need the technocratic government that would stick to a plan on going out of the crisis…. would be personally responsible for concrete results in the set terms and would remove the principles of personal fidelity or party liabilities from practice,” the ULIE said in a press release after discussing the government’s report for 2015 on February 12.
The League said that the positive results of the government’s work last year were restructuring of debts, diversification of energy sources, reform of public procurement and attempts to trigger the tax reform, in particular, to reduce single social security tax to 22%, refuse from advance payments of profit tax by companies, revoke the imports duty, as well as deregulation measures.
“However, there are not enough convincing arguments that enough grounds were created to resume growth of the Ukrainian economy and to carry out long-awaited reforms in 2016 as it is forecasted in the government’s report,” the ULIE said, pointing at the worsening of investment conditions and state support of national producers on the global markets.
“The currency restrictions, too high credit rates at Ukrainian banks do not allow receiving funs required to diversify exports of Ukrainian companies that suffer from the Russian embargo most of all,” the ULIE said, citing Head of the crisis Council of NGOs and ULIE President Anatoliy Kinakh.
A number of major business associations, NGOs and think tanks in Ukraine are now working to prepare a package of proposals to qualitatively improve the tax system, which, in turn, should stimulate the economy and ensure GDP growth in the current year.
A new bill, as proposed by the business community, should provide for a radical reduction in all major fiscal rates, preserve the simplified tax system along with the settlement of controversial issues around it, maintain special rules of taxation for the agricultural sector, cancel advance payment of taxes, which is stipulated in the current Tax Code, and VAT accounts, etc.
Related debates go on as part of round table discussions and meetings of NGOs’ expert groups and other organizations. The Ukrainian League of Industrialists and Entrepreneurs and the Anti-Crisis Council of NGOs stress that the preparation of the package of the proposals should be completed in the first quarter of this year, so that the expert debates could shift to the parliamentary level in spring.
The implementation of the bill, which is being prepared, will not in general have a negative impact on budget revenues, representatives of the Ukrainian business community say, as its provisions are aimed at a reduction in the share of the shadow economy, a recovery in business activity, an increase in the investment attractiveness of Ukraine’s economy (primarily through stimulating the domestic investor), and the restoration of economic growth.
The reduction in the tax rates will be compensated by an increase in tax revenues thanks to the growth of production and sales of goods and services, invigoration of the domestic market (an increase in households’ purchasing capacity and the development of small-sized businesses), measures to bring the economy out of the shadows. Ukraine’s GDP is expected to grow by 17% as a result of these efforts.
What is more, a large-scale business forum has been scheduled for March 2016 to discuss the business and investment climate, tax reform, activation of the domestic market as well.
Ukrainian entrepreneurs and industrialists have held a series of meetings in Washington, D.C., with representatives of U.S. companies and business associations, including the U.S.-Ukraine Business Council. The sides discussed the need to strengthen the Ukrainian economy as a prerequisite for Ukraine’s national security, improve the investment climate, and establish closer ties between Ukrainian and U.S. entrepreneurs.
Despite rather negative indicators of domestic production and a decline in GDP in the past year by almost 11%, Ukrainian businesses actively get involved in the process of reforming economic, fiscal, monetary policy, sharing their own success stories and proposing joint work with the government’s officials.
The Ukrainian business community sees the launch of full-fledged free trade with the European Union as of January 1, 2016, as a huge incentive for the Ukrainian producer, which requires modernization, rapid adaptation to technical regulations and quality standards used in Europe. Certainly, there are still many issues to be addressed, in particular, preparation by Ukraine of its own homework: the fight against corruption, the creation of conditions for the rule of law and equality before the law, energy security, and innovation policy as well.
“We are sure that European integration efforts will significantly invigorate our cooperation with North America,” President of the Ukrainian League of Industrialists and Entrepreneurs (ULIE) Anatoliy Kinakh said at the meeting.
The U.S. side has completely supported this view, stressing that the primary task of the Ukrainian government and civil society should be the modernization of the economy. “Economic self-sufficiency is the main “weapon” to protect national interests,” the U.S. partners said.
In this context, they positively evaluated an anti-crisis plan of joint actions of the Ukrainian government and businesses, which was presented to them. This only comprehensive plan available in Ukraine now to overcome the negative factors in the economy, which was developed by hundreds of Ukrainian business associations, entrepreneurs, academics and professional analysts, was previously presented to top officials in Ukraine and is now pending joint implementation with possible amendments or modification.
“The ULIE and the Anti-Crisis Council of NGOs are willing to step up interaction with U.S. businesses, strengthen cooperation in investment, joint work on bilateral markets and on the markets of third countries,” the ULIE president concluded.
KYIV. Feb 12 (Interfax-Ukraine) – Ukraine has removed barriers regarding the health certificates that allows exporting confectionary nut-containing products to the EU.
“Our one-year saga to remove one of the barriers to export Ukrainian confectionary products to the EU successfully finished. In 2014, the technical regulations took effect in the EU that required health certificates for our nut-containing confectionary products. No Ukrainian power agency took responsibility for the issue of the certificate,” President of Ukrkondprom Association Oleksandr Baldyniuk wrote on his Facebook page.
In November 2015, the issue was put on the table of Deputy Agricultural Policy and Food Minister for European Integration Vladyslava Rutytska. The State Veterinary and Biosecurity Service of Ukraine has drawn up the required procedure under her control and started issuing the certificates to exporters.
“Last week first batches of these products went to the European Union,” he said.
KYIV. Feb 12 (Interfax-Ukraine) – Kyiv believes it will be able to promote its products on the Iranian market after the lifting of international sanctions, Deputy Economic Development and Trade Minister, Trade Representative of Ukraine Natalia Mykolska has said.
“Iran is a promising market for us, not only for agricultural products, but also for the industrial enterprises products,” she said during a meeting at the Infrastructure Ministry on Friday.
At the same time, Mykolska noted specific nature of the Iranian market and the associated difficulties in promoting Ukrainian goods.
For his part, Ukraine’s Infrastructure Minister Andriy Pyvovarsky stressed Iran’s interest in Ukrainian products, in particular in the railway products.
KYIV. Feb 11 (Interfax-Ukraine) – Revenue of the national budget from the excise duties on tobacco grew by almost one fourth in 2015, to UAH 22.2 billion, the Ukrainian Center for Tobacco Control reported on Tuesday.
The increase in revenue by over UAH 4 billion was recorded without a rise in sales of cigarettes that did not change compared to the previous year – 73 billion cigarettes. Budget revenue grew, as in July and September 2015 the excise duties were increased. In addition, in January 2015, the tax on unfiltered cigarettes was increased to the level of filtered cigarettes. Finally, the average price of a package of unfiltered cigarettes grew from UAH 6 to UAH 11, and their sales fell from 12.7 billion in 2014 to 5.8 billion in 2015. Imports of cigarettes fell last year from 6.5 billion to 4 billion.
Cigarette production in 2015 grew by 8%, to 93 billion from 86 billion. This is linked to a rise of exports to 23 billion from 18 billion and a decline in imports.
The center said that in the fourth quarter of 2015 sales of cigarettes grew to 22 billion, while in the previous three quarters it was 17 billion on average. Growth in sales was artificial provoked by price wars of tobacco corporations starting from October 2015. They aimed at not allowing growth of the excise duties in 2015.
“Despite price wars budget revenue in the fourth quarter grew to UAH 6.6 billion, while in the previous quarters they were UAH 5.2 billion,” Head of the tobacco control department of the Ukrainian Institute for Strategic Studies of the Health Ministry of Ukraine Kostiantyn Krasovsky said.
Tobacco corporations artificially increased cigarettes sales in the fourth quarter of 2015, waiting for a large rise in the excise duties from January 2016. Thus, the excise duty was paid at the rates of 2015, and cigarettes were left at warehouses and were sent to the retail chains in 2016. A temporary fall in sales of cigarettes in the first months of 2016 could be seen. If sales of cigarettes in 2016 falls to 66 billion (10% down on 2015), thanks to a rise in the excise duties budget revenue this year would be at less than UAH 28 billion.
