Premier Wants to Take on Deadbeats Again

Premier Valery Pustovoitenko intends to implement tougher measures against companies not paying for energy and having tax arrears.

“I did not raise the issue of payments for natural gas and electricity before the elections, but now I am going to be tougher,” said the Premier last Monday, Interfax- Ukraine reports.

Simultaneously, the Prime Minister said the Cabinet will not carry out large-scale cutoffs in the provinces. “The President told [the Cabinet] not to cut off, and we will not cut anybody off, but debtors, however, must pay for electricity and natural gas,” the Premier stressed.

Mr. Pustovoitenko added that the government will intensify its fight against state budget defaulters. According to him, the arrears due to state and local budgets total about UAH 11 billion. He emphasized that after establishing order regarding payments to the budget, Ukraine will be quite in a position to avoid considerable foreign borrowing.

According to the Premier, in the near future he intends to hold a series of meetings, in particular, with chiefs of oblast state administrations, where he will focus the attention of heads of ministries, departments, and regions on the necessity of paying state and local budget obligations.

The Premier has ample reason to be uneasy. The electricity sector is deeply in debt. And obviously cutoffs cannot be avoided. Tax arrears, based on the data of the State Tax Administration, as of November 1 is not UAH 11 billion, but 11.5 billion, which is 18% higher than the level of early this year. Consequently, the Presidential Administration presented a proposal to revoke tax credits granted a number of companies by the Cabinet.

Will Mr. Pustovoitenko content himself with accepting this proposal, or will he again resort to civil defense (if he remains Premier, of course)? Because recently there has been an increase not only in tax arrears and energy nonpayment, but also in the debts of enterprises which received loans under government guarantees.