Stelmakh does not mind

On May 23 this country’s tax service and central bank top executives held a routine meeting for the second time in the past three years. That the post-meeting joint press conference began with a 40-minute delay is a clear indication that the bankers and tax men found it quite difficult to discuss the points of common interest. Moreover, as Ukraine’s State Tax Administration (STA) Director Mykola Azarov said, “the discussions went far outside the framework of the pre-planned agenda” – so far that the two agencies did not discuss at all the previously announced theme, Coordinating STA and NBU Efforts to Fulfill the Law On the 2002 State Budget.

The meeting resulted in signing a general agreement on cooperation between the STA and NBU. The two sides mapped out joint measures to combat money laundering and hard currency smuggling, discussed the taxation of banks and the functioning of the banking system in light of the law on the procedure of clearing taxpayer arrears, and established a mechanism of information exchange. According to National Bank Governor Volodymyr Stelmakh, the agreement reached specifies nothing entirely new in addition to what is already written in the current regulatory instruments. The NBU chief thinks this meeting will contribute to the “greater openness of banks,” and accordingly banks should easily cooperate with the tax men under the law rather than become an opposing party. “Banks could derive more good for themselves if they maintained friendly relations with the tax administration,” Mr. Stelmakh said, meaning the receipt of information about fraudulent firms. As Mr. Azarov put it, tax collectors in turn expect commercial banks to supply only one type of information, that is, about “suspicious” banking operations.

Banking confidentiality was a point, the mutual understanding of which strained cooperation. Mr. Stelmakh noted that the two sides had finally managed to overcome certain differences in interpreting and delimiting this important notion. According to Mr. Azarov, the tax service had made “a very serious commitment” to keep commercial and financial information confidential and is ready to bear responsibility for any violations.