Ukraine calls off tax po­lice, seeks for­eign in­vest­ment

Kuwait Times - - BUSINESS -

KIEV:

Ukrainian Pres­i­dent Petro Poroshenko yes­ter­day tried to bring in for­eign in­vest­ment and slash cor­rup­tion by tem­po­rar­ily ban­ning the tax po­lice from con­duct­ing unan­nounced checks on com­pa­nies’ oper­a­tions. The mea­sure is also sup­posed to let small busi­nesses thrive by let­ting them stay open with­out any in­spec­tions for three years.

The former Soviet repub­lic is keen to shed the la­bel of Europe’s most graft-rid­den state that was stamped on it by the Euro­pean Court of Au­di­tors last month. Ukraine’s tax po­lice and other in­spec­tion au­thor­i­ties are no­to­ri­ous for ac­cept­ing bribes as a re­ward for let­ting com­pa­nies stay in busi­ness af­ter com­mit­ting mi­nor-or even made-up­vi­o­la­tions.

An im­prove­ment in the cash­strapped and war-torn coun­try’s busi­ness cli­mate has been a con­stant de­mand wrapped into a $17.5-bil­lion (16.6-bil­lion-euro) res­cue pack­age ap­proved by the In­ter­na­tional Mon­e­tary Fund last year. Poroshenko has vowed to fight cor­rup­tion by crack­ing down on the power wielded by a hand­ful of oli­garchs and open­ing up of­fi­cials’ in­comes for view­ing to all Ukraini­ans cu­ri­ous about their elected lead­ers’ pos­si­bly ill­got­ten gains.

‘Con­trol­ling au­thor­i­ties’

The sec­ond mea­sure is al­ready in ef­fect while the battle to reign in the bil­lion­aires is tak­ing more time. The law adopted yes­ter­day moves one step fur­ther by putting tough curbs on the pow­ers of the tax po­lice. “This will sub­stan­tially re­duce the num­ber of in­spec­tions by the con­trol­ling au­thor­i­ties,” the pro-West­ern leader said in a state­ment. “We are go­ing to see a qual­i­ta­tive change in the in­vest­ment and tax cli­mate.”

The world bank ranks Ukraine 80th on its 2016 Ease of Do­ing Busi­ness in­dex. That is 40 spots worse than its arch-ri­val Rus­sia-a coun­try where the Kremlin dom­i­nates busi­ness and the courts are viewed as bought off-and only one grade bet­ter than its 2015 rank­ing. Ukraine faired es­pe­cially poorly in cat­e­gories such as tax­a­tion and hand­ing out con­struc­tion and busi­ness per­mits.

Poroshenko said the tax au­thor­i­ties will no longer be in­ves­tiga­tive but rather “con­sul­ta­tive” in na­ture. That means com­pa­nies will be able to turn to them with ques­tions but no longer have to open up their books dur­ing spot in­spec­tions. Econ­o­mists have said that such sud­den checks have long been used by busi­ness­men to close the oper­a­tions of a ri­val on a tech­ni­cal­ity.

The tax po­lice have also been re­ported to con­duct raids on com­pa­nies that fall out of fa­vor with a par­tic­u­lar ty­coon or politi­cian with busi­ness ties. The law says that unan­nounced tax in­spec­tions may re­sume anew at the start of 2018. — AFP

AL­BANY: In this March 15, 2016 file photo, the state Capi­tol pro­vides a back­drop as sup­port­ers of a $15 min­i­mum wage rally at the Em­pire State Plaza. — AP

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