“We’re against the re­turn of cor­rup­tion to the VAT sys­tem.”

– Fi­nance Min­is­ter Olek­sandr Dany­lyuk

Kyiv Post Legal Quarterly - - Contents -

Fak­ing it Dany­lyuk has faced a se­ries of at­tacks that have in­creased in their sever­ity.

Prose­cu­tors are look­ing into the min­is­ter’s time as an in­vest­ment banker in Lon­don. He is sus­pected of evad­ing his Ukrainian taxes while there. The case has raised eye­brows, given that a dou­ble tax­a­tion treaty ex­ists be­tween Ukraine and the United King­dom. Other at­tacks have at­tempted to hu­mil­i­ate the 42-year-old politi­cian. On Nov. 30, an anony­mously run Face­book page called "nemovchi" (don’t keep silent) ac­cused Dany­lyuk of sex­u­ally ha­rass­ing a col­league via a se­ries of Face­book chat screen­shots.

The im­ages — which had fonts and im­age sizes dif­fer­ent from those used by Face­book — also used a pic­ture of for­mer Pri­vat­bank em­ployee Vik­to­ria Strakhova as the avatar of the al­leged ac­cuser.

Strakhova said in her own Face­book post that the mes­sages were faked, say­ing “ap­par­ently, not only do the op­po­nents of the fi­nance min­is­ter have chicken brains, but also cer­tain sex­ual de­vi­a­tions."

"The whole ex­change is a pho­to­shop," she added.

Bud­get cud­gel Other el­e­ments of the VAT sys­tem re­main open to po­lit­i­cal ma­nip­u­la­tion.

One out­wardly mun­dane but ex­tremely fraught ex­am­ple is the VAT on agri­cul­tural oil.

On Dec. 7, the Rada can­celed the VAT on ex­ports of un­pro­cessed agri­cul­tural oils in a stated bid to in­crease value-added pro­duc­tion in Ukraine. The change goes into ef­fect March 1.

But the move has led to an out­cry from some pro­duc­ers, who ar­gue that the move un­fairly ben­e­fits com­pa­nies that can launch value-added agri­cul­tural oil pro­duc­tion within three months.

“If this was re­ally a lo­cal pro­duc­tion strat­egy, the govern­ment would be im­ple­ment­ing a full, of­fi­cial plan,” said Taras Vysot­sky, di­rec­tor gen­eral of the Ukrainian Agribusi­ness Club. “But when there are only two months given, there’s a sense that this was done to sup­port cer­tain pro­duc­ers.”

Vysot­sky added that it will lead to “di­rect losses” for much of the in­dus­try. “Un­for­tu­nately, yes, it’s be­ing used as a weapon,” he said.

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