Let the government hear us!

Recently, Ukrainian small business organizations requested that parliament adopt a moratorium on the approval of the draft Tax Code prepared by the government of Prime Minister Mykola Azarov. Near the parliament building, there was an angry rally attended not only by Kyivan entrepreneurs, but also by their colleagues from around Ukraine. All of them wanted to make their voices heard. The protests also took place in other cities, including Lviv and Poltava. One could see posters saying “Azarov’s Tax Code is a wreath on the grave of small and medium businesses,” “Where are the promised tax holidays for small businesses?”, “No to the terror of tax police!”. Entrepreneurs declared that on November 16 (The Day on which the consideration of the draft Tax Code, on second reading, is to take place) they are ready to go to Kyiv to picket the parliament.

The small-business community enjoys the moral and political support of the opposition, which argues that the Tax Code will further entrench the shadow economy. Finance Minister of the opposition government, MP Andrii Senchenko says “Azarov’s government uses tax terror, which increases the size of the informal sector”.

Worst of all, the Tax Code novelties split the Ukrainian business community. Director of the Budtsentr company (Dnipropetrovsk), Dmytro Levchynsky told The Day that for him the biggest problem of the new Code is the VAT, which remains practically the same as before, and is a corruption tax which is blocking opportunities for the export of Ukrainian goods. “In fact, this is a sales tax, but with exceptions for some,” said the businessman, who self-identifies with medium-business community. As for small business and its demands, Levchynsky thinks the rules in question should be improved. But he argues that novelties to the simplified taxation system were invented not only by the tax service — the medium-business community has struggled long and hard to abolish rules or substantially change this system, which creates an unjust competition. “In the simplified system, there was a million of genuine simplified tax system users and two million of allegedly independent entrepreneurs who were used to minimize taxes paid by big corporations,” notes Bustsentr’s director.

Indeed, the genuine simplified tax system users, the small-business community, has to suffer because of those who work under that mask. Private entrepreneur Tetiana Halytska told The Day that she, like her colleagues in front of the Supreme Council building, was also protesting against the Tax Code. “We demand,” she says, “to keep everything as it was — either a fixed tax or simplified taxation. Let everything to be as it is. We are used to such taxes and expect them to continue. With such taxes we can still manage, but with the proposed novelties in the Tax Code — we cannot.”