Real GDP in 2021-2025 (forecast)
Source: Open4Business.com.ua and experts.news
Speaker of the US House of Representatives Mike Johnson said that Washington would provide additional funding for Kyiv, Politico reports.
“I think it will all come together in the coming days. I’m confident and optimistic that we can do it – get it done,” he said.
Johnson said that there is a sense of urgency in getting aid to both Israel and Ukraine, adding that there is “a lot of thoughtful negotiations going on among members of Congress.”
The speaker also said that assistance to Israel is a top priority for the United States and called assistance to Ukraine another priority.
“Of course, we can’t let Vladimir Putin march through Europe, and we understand the need to provide assistance there (Ukraine – IF-U),” Johnson said.
He explained that if Ukraine needs additional assistance, which most members of Congress consider important, then it is also necessary to work on changing US border policy.
Starting December 10, Hungarian Railways will launch a new daytime direct train No. 143/146 Vienna – Chop – Vienna, which will provide convenient connections to Ukrainian night trains to Kyiv and Lutsk via Lviv and Rivne, Ukrzaliznytsia reported on its Telegram channel on Friday.
It is noted that the cost of a ticket from Kyiv to Vienna (2nd class seat car + compartment) will be about UAH 2.5 thousand, which is UAH 1 thousand cheaper than the direct Kyiv-Vienna connection by “ritz” class cars.
It is also noted that tickets for the domestic part of the trip can be purchased in the UZ app, chatbots, on the website and at station ticket offices, and for the Vienna-Chop-Vienna part – at international ticket offices of UZ or Austria.
“Ukrzaliznytsia added that it plans to launch online ticket sales to Hungary and Austria in the coming weeks.
According to UZ, border and customs operations will take place at the Chop station, with a transfer time of 2-2.5 hours.
“Passengers should not worry about their connection in Chop because of possible delays, as the transfer has been agreed upon: the train will always be waiting for all passengers,” the company said.
At the same time, it is specified that the train #146 Chop-Vienna will depart daily at 08:23, arriving in Budapest-Kelethé at 14:20 and in Vienna at 17:20.
On the way back, train #143 Vienna-Chop departs from the Austrian capital at 10:42, Budapest-Kelethé at 13:40 and arrives in Chop at 20:59.
As reported, on October 4, UZ announced the launch of a new rail service between Lviv and Warsaw via Rava-Ruska station, which is operated by the rolling stock of the Polish rail carrier SKPL.
The goal is to organize analytical discussions on the implementation of industrial investment projects, present a report on the prospects and mechanisms for creating new investment funds, and award investors who have started and are implementing projects after February 24, 2022.
The event will take place on December 1, 2023, at the UCCI and will bring together high-ranking government and business representatives.
The recovery and economic transformation of Ukraine depends on adequate funding for reconstruction projects and attracting private investment. Despite the significant challenges of today, Ukrainian and international companies continue to invest, create new jobs, support the country’s economy, and show the world an example of project implementation without waiting for the end of hostilities.
Participants will discuss the needs of business and the state in terms of industrial, energy-efficient equipment and materials, economic transformation, and factors of Ukraine’s investment attractiveness.
The event will include an award ceremony for companies investing in Ukraine after 02/24/22, public figures and media contributing to the development of Ukraine’s investment environment.
Time: 14:00-18:00
Among the speakers:
– Sergiy Tsivkach – Executive Director of UkraineInvest, the government office for attracting and supporting investments
– Volodymyr Kuzio – Deputy Minister of Economy of Ukraine
– Dmytro Kysylevsky – Member of Parliament of Ukraine, Deputy Chairman of the Committee on Economic Development of the Verkhovna Rada of Ukraine
– Hanna Zamazeyeva, Head of the State Agency on Energy Efficiency and Energy Saving of Ukraine
Organizers: UkraineInvest, Government Office for Investment Promotion and Support, and the Ukrainian Chamber of Commerce and Industry
Program of the event
https://shorturl.at/gixO4
Media accreditation is required:
E-mail: nazarii.volianskyi@ukraineinvest.gov.ua; tel. +38063-023-11-93
Dmytro Kysylevsky, Hanna Zamazeyeva, Sergiy Tsivkach, UKRAINEINVEST, Ukrainian Chamber of Commerce and Industry, Volodymyr Kuzio
The Allard Pearson Museum has transferred to Ukraine artifacts from four Crimean museums that were presented at an exhibition in Amsterdam, the National Museum of History of Ukraine reports.
“After almost 10 years of litigation, artifacts from four Crimean museums that were presented at the exhibition “Crimea: Gold and Secrets of the Black Sea” in Amsterdam have returned to Ukraine. The Allard Pearson Museum transferred them to the National Museum of History of Ukraine. It is there that they will be stored until the de-occupation of Crimea,” the museum’s website said on Monday.
The press service reminds that the exhibition of artifacts was held from February to August 2014 at the Allard Pearson Museum. It featured items from the collections of the National Museum of History of Ukraine and four museums in Crimea: National Reserve “Chersonesos Tavriya” (Sevastopol), Central Museum of Tavrida (Simferopol), Bakhchisaray Historical and Cultural Reserve and Kerch Historical and Archaeological Reserve.
“In February 2014, Russia began the occupation of Crimea. Objects from the collection of the National Museum of History of Ukraine returned to Kyiv after the exhibition. At the same time, it became impossible to return valuables from Crimean museums to the territory not controlled by the Ukrainian authorities. However, the Crimean museums, which are de facto controlled by the Russian authorities, insisted on doing just that. A trial has begun in the Netherlands,” the statement said.
In December 2016, a court in Amsterdam ruled to transfer the artifacts to Ukraine in accordance with the law on heritage. In addition, the Court of Appeal decided to satisfy the claim for the transfer of Crimean artifacts to Ukraine, but on the basis of the Law of Ukraine “On Museums” and the order of the Ministry of Culture of Ukraine of March 2014, according to which the Minister of Culture has the authority to decide on the transfer of artifacts for safe keeping if there is a risk of their loss/damage/destruction.
At the same time, the Crimean museums filed a cassation appeal with the Supreme Court of the Netherlands to overturn the decision of the Court of Appeal, but on June 9, 2023, the court dismissed the museums’ cassation appeal and upheld the appeal decision.
According to the decision of the Supreme Court of the Netherlands, Ukraine had to pay the Allard Pearson Museum EUR111,689 with interest for the entire period of storage of the Crimean museums’ collections.
“After fulfilling the obligations undertaken by the National Museum of History of Ukraine and the Ministry of Culture and Information Policy of Ukraine, the Allard Pearson Museum refused the payment determined by the court in its favor,” the statement said.
Currently, experts are examining the condition of 565 artifacts, including ancient sculptures, Scythian and Sarmatian jewelry, and Chinese lacquer boxes that are 2,000 years old.
According to the State Customs Service of Ukraine, the Kyiv customs office has begun customs clearance of the Scythian Gold.
“Right now, a truck with 2,694 kg of cultural property known under the common name ‘Scythian Gold’ has entered the territory of the Kyiv-Pechersk Lavra, where Kyiv customs officers will identify the treasures in the Treasury of the National Museum of Ukraine,” reads a message posted on the telegram channel.
The law on raising the bank profit tax from 18% to 50% in 2023 and to 25% in the following years was adopted without discussions with banks, it is discriminatory and has long-term negative consequences for the investment and business climate in Ukraine, said Oleksandr Pysaruk, Chairman of the Board of Raiffeisen Bank (Kyiv).
“Excessive profits of banks cannot be determined based on the results of one year. Retrospective taxation of excessive profits for 2023, as well as an increase in bank profit taxes in the future, is unreasonable and discourages bank shareholders from investing in this business,” the head of Ukraine’s largest bank with foreign capital said in an interview with Interfax-Ukraine.
Pysaruk emphasized that he supports the need to temporarily raise the bank profit tax in the current circumstances and has publicly stated this. According to him, the version of the law approved in the first reading to increase the tax to 36% for 2024-2025 was discussed with banks and was fair.
According to the banker, the retroactive taxation approved without discussion at the end of the year creates a very dangerous precedent and tax uncertainty for all economic agents, especially for foreign investors. “Retrospective is bad in itself, but when retrospective is linked to 50% instead of the existing 18%, it is a shock,” he added.
Commenting on the 50% rate, Pysaruk explained it as a desire to collect an additional 0.3% of GDP from banks as part of the revision of the program with the IMF, when state-owned banks are already paying large dividends.
“In fact, the payers of this record-high tax are private banks, of which the largest tax burden falls on banks with foreign capital. And the retrospective taxation is compounded by disproportionate and discriminatory treatment of private shareholders of the banking system,” the banker stated.
He noted that the problem is also the unfair singling out of banks from the rest of the economy in terms of raising their income tax to 25% on a permanent basis in the coming years.
“Why are they the only ones to receive the tax increase? Why 25% and why permanently? Why not 28%, 22%, or 20%? … This is an example for investors and business in general: if you are transparent, you will be taxed even more. And at the same time, you leave a bunch of economy that does not pay taxes or pays little,” Pysaruk said.
In his opinion, the tax on banks starting in 2024 should have been discussed as part of the preparation of the National Revenue Strategy prescribed in the program with the IMF, which the Ministry of Finance is obliged to present by the end of this year and which declares the expansion of the tax base.
The head of Raiffeisen Bank also emphasized that banks are a cyclical business, and its profitability should be assessed over a fairly long period of time, on average 7-10 years. According to him, in the period from 2013 to 2023, the total return on equity of Ukrainian banks (excluding PrivatBank and its nationalization) was 69%, i.e. approximately 6% per annum in hryvnia, while the cost of capital in any year after 2013 exceeded 20% per annum.
“That is, the last ten years have been unprofitable for bank shareholders. The situation is much worse for foreign shareholders of Ukrainian banks who calculate their total income in euros. Over the past ten years, the banking system has suffered a total loss of 52%, approximately -8% per annum in euros,” Pysaruk said.
He explained this by the large losses of Ukrainian banks in 2014-2016, the almost fourfold devaluation of the national currency and the inability to receive dividends for several years.
“Today, the banking business in Ukraine is unprofitable. The cost of capital is very high due to high inflation and very high risks in the country. And I’m not even talking about the war,” stated the Chairman of the Board of Raiffeisen Bank.
In his opinion, the adopted law will discourage strategic banking investors from participating in the privatization of state-owned banks, which is necessary given their high market share.
“We may be left with a banking system with an excessive share of state-owned banks for a very long time,” Pysaruk said.
He added that this approach also does not stimulate foreign direct investment in other industries. “This is a very bad story for a country that needs external assistance both during the war and afterwards for development,” the banker said.
Commenting on the impact of the increased tax directly on Raiffeisen Bank, the Chairman of the Board said that in the short term there will be no significant impact, as the bank has excess capital and liquidity. “We will pass the NBU’s stress test without any problems and will continue to support our clients,” Pysaruk said.
At the same time, he believes that some other banks that are not as well capitalized may face problems.
“The National Bank will probably have to mitigate its plans to recapitalize banks, because it was the party that agreed to this decision. Because taxing banks in such a cruel, unfair way and then demanding capital is an additional horror story for investors,” the banker said.
He added that, combined with the NBU’s further increase in capital buffer requirements in line with EU standards, the higher corporate tax will reduce banks’ ability to generate capital to meet the increased demand for loans as Ukraine develops after the war.
Pysaruk also suggested that some banks may appeal to an international court because the adoption of such a law violates the provisions of intergovernmental agreements on investment protection, citing Spain as an example where banks challenged the windfall tax.
The Chairman of the Board of Raiffeisen Bank, who was formerly the First Deputy Governor of the National Bank of Ukraine and then worked for the IMF for three years, also expressed regret that the Fund had agreed to such a tax increase. According to Pysaruk, this is due to the program’s basic assumptions, which are under threat, of ending the war in mid-2024 and a certain level of international assistance.
“The IMF has to draw up a macroeconomic model and calculate the debtor’s ability… to repay the loan. And this tax was probably needed for such a model to be developed. But the price of the issue is exactly this: in order to save this program and continue it, laws are being introduced that reduce Ukraine’s already low investment attractiveness and may hinder plans to attract private foreign capital to rebuild Ukraine after the war,” the banker said.
According to the National Bank of Ukraine, as of October 1, 2023, Raiffeisen Bank ranked 4th in terms of assets (UAH 196.35 billion) among 63 banks operating in the country. Its net profit in January-September this year amounted to UAH 6.14 billion compared to UAH 2.39 billion in January-September last year.
In October 2005, the bank became part of the Austrian banking group Raiffeisen Bank International AG. Currently, Raiffeisen Group owns 68.21% of the bank’s shares, while the European Bank for Reconstruction and Development owns 30%.
