All that's left is canceling money
By Yana MOISEYENKOVA, The Day
Premier Valery Pustovoitenko had warned businessmen at Cabinet sessions
that it would happen. Now it has. At the end of last week city district
tax administrations forwarded lists of legal entities to commercial banks
within their jurisdiction, demanding information about their accounts,
which the banks will have to provide [!]. So here we are. Goodbye to bank
confidentiality. So what kind of democratic society do we live in?
From now on tax people can "frisk" any business entity at any time on
any pretext (especially when ordered from above). Remarkably this metaphor
was confirmed to The Day by officials at one such district tax administration,
although with reservations: to examine a business entity's bank accounts
this entity must be guilty of some transgression (e.g., acting contrary
to the law, evading taxes, having excess revenues or losses, etc.). Further
conversation made it clear that the public prosecutor or other law enforcement
authorities did not necessarily have to step in at that stage as they would
be informed by the tax administration simultaneously with the bank. In
other words, it would remain anyone's guess who exactly decided to check
bank accounts, meaning that this decision could be made by anyone. Another
inference: no one will now guarantee that such inspections will be made
just to combat monetary outflow and other financial wheeling and dealing.
"This practice - over-regulation and excessive interference on the part
of any fiscal authorities - will make businessmen move in the shadows,
go illicit, because operating legitimately is becoming unbearable, and
we have no strength left to fight the government machine. A businessman
should not have to fight it. He should work, creating jobs placements,
wages, and payments to the budget," The Day was told by Vyacheslav
Kredisov, president of the Mezokred group of companies and member of the
Coordinating Council of the New Formation Business Association.
Yet the banks have no alternative if they want to keep operating. They
will provide such information, although Ihor Frantskevych, Chairman of
the Board, Reiffaisenbank Ukraine, says that the banks will, of course,
warn their clients about tax bloodhounds sniffing around. Incidentally,
the question of how such information about bank accounts will be provided
(tax people want it in the form of computer files) remains legally open.
Mr. Frantskevych promised at a news conference that RU Bank, for example,
would issue such information only as hard copies. Naturally, this, just
like computer files, does not rule out leaks, an opportunity that will
be pounced on by rivals, and other negative consequences that will do nothing
to encourage business activity.






