Too Many Tax Laws Destabilize The Economy, Says Mykola Azarov
For the time being, Mykola Azarov, head of the State Tax Administration of Ukraine, is not going to step down as leader of the Party of the Regions. “It would be absolutely wrong to make demoralizing statements on the eve of the party congress and at the present crucial moment when we are trying to form an election bloc,” he declared. He said the decision on which of his two posts he will retain is to be taken at the party convention. In his earlier interview, Mr. Azarov said he might eventually resign as the party’s leader. He said the major reason was his intention to concentrate on a single career, that of politician or civil servant.
“Of 451 bills considered by Verkhovna Rada’s eighth session, 187 or almost a half, are related to taxation,” he said, speaking at the press conference on October 22 to mark the coming fifth jubilee of the State Tax Administration. Such a large number of new tax laws destabilizes both the economy and the tax service, he noted.
There is another also aspect to be considered. “In the ten years of Ukrainian independence, quite a number of tax laws were aimed at rectifying momentous subjective problems of specific industrial sectors and regions, not at improving the tax system,” he declared. “In some cases, new legislation was adopted to suit the interests of isolated enterprises.” Since the start of 2001 alone, 73 new laws have been enacted, increasing the amount of tax breaks by 42%, The Day was told by the STA press service, with 22 of these laws cutting budgetary revenue by UAH 12.7 billion. It is no secret that any tax breaks, to say nothing of the unjustified ones, deeply affect the market.
All this gives more weight and meaning to Azarov’s statement that “three years have passed since the STA submitted to Verkhovna Rada its draft of the Tax Code. Who stopped parliament from enacting the code, not a drone of unsystematic laws?” The STA head, however, did not rule out that the draft had its flaws: “I repeatedly said that the draft had been prepared to suit our interests and we accept such criticism, but who was there to stop the lawmakers from revising and rectifying such flaws?” he asked rhetorically. Incidentally, he said, 3065 proposals by lawmakers had been considered by the authors of the draft Tax Code.
In a surprise move, Azarov spoke critically about some STA documents interpreting the tax laws (documents mandatory for tax inspectors) in his interview with The Day, saying in some cases he has to read a document submitted for his and the Justice Ministry approval up to five times to grasp its content. Striking an optimistic note, he added, “To analyze new STA documents, we intend to set up public boards including representatives of businesses.”
Last Friday at a meeting of the Tax Service’s high officials with press representatives, letters of thanks signed by Mykola Azarov were delivered to the agency’s media partners, in particular, to The Day.
