Last-minute veto

President Viktor Yanukovych of Ukraine finally took over the process of drawing up and adopting the Tax Code on November 30, when he vetoed the bill passed by the Ver-khovna Rada, thus meeting one of the key demands of the Ukrainian businessmen protesting the new law on the Maidan. Remarkably, this veto was exercised in Boryspil minutes before Yanukovych boarded his flight to Kazakhstan to attend the OSCE summit. He had a tight sche-dule on Tuesday, greeting the public prosecutors and their staff on their professional holiday at 11:30 a.m., then meeting with the government, particularly its economic department, at Boryspil Airport, even finding time for a briefing: “We have agreed that the task force formed by the government, including representatives of the president and small and medium business, will work out the changes to the Tax Code. I am going to study them. If they answer the requirements to this Code, I will sign them and submit them to parliament.” Followed a dramatic pause, reminding one of that made by Boris Yeltsin before declaring a ban on the CPSU, and then Yanukovych announced:

“I have vetoed this law today.” He noted that there is every opportunity to create a tax code that will make it possible to upgrade the economy and drag it out from the shadow: “I believe that the people responsible for this document will do their job shortly.”

Among those present at Boryspil Airport were Prime Minister Mykola Azarov; Deputy Prime Ministers Andrii Kliuiev and Borys Kolesnikov; Minister of Justice Oleksandr Lavrynovych; Iryna Akimova, first deputy head of the Presidential Administration, and the administration’s deputy head Olena Lukash. Serhii Tihipko, Deputy Prime Minister in charge of the economy, whose contribution to the development and pushing through of the Tax Code is hard to overstate, was not present. Looks like the man has failed to display enough flexibility, so that now he is faced with the difficult task of either repenting or making a certain decision. Some experts point out that he could have scored quite a few electoral and career points with the Tax Code. Visiting Georgia recently, Tihipko publicly praised its effective legislative and administrative reforms. He must have known about Saakashvili’s intention of basically changing the tax service, curing it of corruption. Why didn’t he use the opportunity to prevent another Maidan confrontation in Ukraine, this time against the Tax Code? Such questions are easy to ask but hard to answer, considering that the cabinet decisions are not made by the country’s greatest liberal but by the nominal leader of an essentially conservative party with a motley membership and ideology.

Besides, working on the new Tax Code, Party of Region people were constantly aware of the opposition breathing down their neck. Although the opposition appeared to have calmed down, they knew this truce wouldn’t last long and were afraid the process of discussing the bill would become politicized. Proof of this is found in a statement made by Kharkiv Governor Mykhailo Dobkin. He said the Tax Code scandal is nothing other than political speculations; that the government and business people could solve this problem by leaving the politicians out of the negotiating process. He believes that politicians, acting under the guise of NGOs, are turning this dialog into a series of ultimatums.

MP Borys Tarasiuk (People’s Rukh of Ukraine) is confident that “business people will withstand… this pressure. This Tax Code must be vetoed.” He is also sure that those in power are simply procrastinating, looking for “people willing to meet more tractable people who will agree with the government’s stand in return for minimal preferences. This is inadmissible.” As it is, the businessmen holding the fort on the Maidan have three demands laid down in a statement issued by the Ukrainian Entrepreneurship Salvation Central HQ: (a) veto on the Tax Code, (b) dissolution of the Verkhovna Rada, (c) no talks with the government until the President vetoes the Tax Code.

After the veto at Boryspil Airport, two of the above demands no longer stand. The third one is very likely to have been inspired by politicians. On The Day the president vetoed the code, MP Andrii Kozhemiakin (first deputy head of the BYuT-Batkivshchyna faction) spoke in parliament and warned: “Should President Viktor Yanukovych fail to veto the Tax Code, there would be every reason for this economic protest to grow into a powerful political resistance movement involving the leading opposition forces.” Now that the code has been vetoed, will the politicians, of whom there are quite a few among the protesters, talk them into abandoning the third demand? Very unlikely, otherwise they wouldn’t be politicians. Their next trump card is the state budget. Now the government and parliament can be accused of having procrastinated the budget-forming process beyond all reasonable limits, so there is the risk of passing the wrong kind of budget bill. This should be debated in parliament, of course, but the main thing is to learn to hear what others have to say.