Fuel-and-Energy Complex Supplies Minuses
The theme of preparing the 2001 budget, discussed the Monday before last at a meeting attended by the President, was raised again two days later at a press conference of Mykola Azarov, chairman of the State Tax Administration. Ukraine’s chief publican confirmed again that the budget would be drawn up with due consideration of reduced rates for the principal taxes. He also stressed that the new rates stipulated by the Tax Code should be introduced step by step: for instance, VAT should constitute 17% in 2001 and 15% in 2002, and the profit tax 25% and 20% respectively. At the same time, the tax base will be expanded in order to make up for the likely losses in revenues.
But Mr. Azarov obviously stretched the truth here, mentioning clearly overrated figures of the expected losses: 4.5 to 8.5 billion hryvnias. Mr. Azarov cited the reduced number of privileges as one sources to compensate for lower revenues: “Ukraine has become a privileged tax area.” He also thinks it unfair that the owners of very expensive cars (the Tax Administration believes there are 6,500 of them in Ukraine) are subject to a low excise duty.
At present, all proposals in connection with the draft Tax Code have been entered in a master table and will be later debated by the People’s Deputies. According to Mr. Azarov, the Tax Code will be passed by parliament late this year at best (i.e., after the budget).
As we know, Leonid Kuchma, addressed the meeting, criticizing the government for allowing budget revenue arrears to increase this year by UAH 3.3 billion. “The fuel-and-energy complex (FEC — Ed.) is responsible for a 100% increment in arrears,” Mr. Azarov claims. “The FEC has monopolized all settlements by voluntaristic methods without due account of overall budget interests.” For example, he went on, settlements with Itera for gas were considered a higher priority than payments to budget coffers. But the greatest harm was caused by UAH 3.6 billion in unjustified mutual non-monetary settlements between FEC facilities in August, which broke the positive tendency of real-money payments. Simplified mutual non- monetary settlements, Mr. Azarov stressed, create favorable conditions for turning the money away from budget payments and for other abuses. The Tax Administration chief also mentioned that commercial structures have recently exported from Ukraine about one million tons of fuel oil at the price of UAH 500 a ton, while Ukraine purchases imported fuel oil for its energy-generating companies at UAH 600-1300 a ton. Does this comply with the intentions of Yuliya Tymoshenko, Vice Premier in charge of the FEC, to personally supervise the purchase of the deficit fuel oil?
INCIDENTALLY
The Cabinet of Ministers has drafted a resolution on the way public sector organizations are to pay their current energy-resources debts incurred from January 1 to July 1 this year as a result of bank-related mutual settlements, Interfax-Ukraine reports. The draft resolution calls on public sector organizations and institutions to pay off their current debts for thermal and electric energy, natural gas, as well as those incurred in connection with the disbursement of subsidies and benefits to the population, by way of the equivalent payment of tax arrears incurred at the same period by electricity and gas supplying enterprises. Under the draft, energy resource suppliers are to secure one-day bank loans to pay off their tax arrears, while public sector organizations will later make payments for the energy resources they have consumed.
