The speech Mykola Azarov, chairman of the State Tax Administration, made at the session of the Coordinating Committee to Combat Organized Crime and Corruption last Thursday seems to portend a certain updating of government approaches to tax policy.
According to the tax authority chief, for several years Parliament has been “obstructing” the adoption of laws aimed at putting the tax collection sphere in order. Providing a possible reason for this, Mr. Azarov gave some quite interesting information: “As of today, 364 People’s Deputies of Ukraine make profits from commercial structures and only 86 Deputies have nothing to do with entrepreneurial activities.” As the tax administration must have found out, People’s Deputies run 202 (sometimes several at the same time), have founded 473, and make profits from 600 businesses. A total 3100 enterprises are in the sphere of their direct or indirect influence. They have imported UAH 13.2- billion (25.3% of the total) and exported UAH 5.2-billion-worth (10.1%) goods, but failed to pay 4.1 billion hryvnias to the budget.
Simultaneously, the chief tax-collector stated that last year about 30 Ukrainian citizens, including 16 Kyivans, declared profits of over one million hryvnias, while about 6,000 Ukrainians purchased Mercedes automobiles costing $100,000 to $300,000.
No doubt, the future of our treasury and taxpaying discipline in this country greatly depend on whether the owners of these luxury cars will pay taxes. However, will the tax authority chief be able in this case to take the next step and announce the names of the most inveterate deadbeats? Otherwise, any crackdown on tax evasion in this country will have clearly political repercussions, especially when there is a threat of political crisis caused by the necessity to railroad the referendum results through Verkhovna Rada By Oleh IVANTSOV, The Day
COMMENTS
Oleksiy KUCHERENKO, People’s Deputy (Revival of the Regions):
“Following these statements, cheerless for Parliament, I want to note that unfortunately our leaders now deal too much with politics but very little with the economy, and display very little common sense and understanding that all our political battles cannot go on forever. Another year or two of such reforms, and people will not forgive us the further drop in their living standards, for, just look at it, three years ago average wages were $89 dollars, and today, as the President said, they are $35. And the people will hold everybody, not only Parliament, responsible. I am very much afraid of a social explosion followed by a deep social cataclysm. For this reason I think we must now do all we can to achieve a coherence of political forces and establish normal and parity-based relations between all branches of power. I don’t believe the future Parliament will be any better if it uses the criteria simulated today. Even being aware that it may be justifiable to “adjust” Parliament to certain criteria at some difficult and crucial stages of history, I still think this attempt is doomed to failure today. It will only continue to split society. This situation will drive many people into an impasse such that they will have to fight for their life, name, and future.
“All I am saying is: relationships between the branches of power should be put into a normal, clearly-defined and comprehensible legal framework. If a certain department has evidence that one deputy or another is a criminal, let us look into it. But what about a person who, being a shareholder in a company and not concealing this, came to parliament only to see mud being flung at him just because he remains a shareholder?.. It seems to me this results from the fact that some bureaucrats are trying to bend over backwards to flaunt their understanding of the course of reforms.”
Eduard HURVITS, People’s Deputy:
“I think Mr. Azarov’s statement is another one of those irresponsible statements that top executives allow themselves to make from time to time. For he gives the specific figure of 364 deputies involved in entrepreneurial activity. Were it in any other country, Mr. Azarov would be demanded to produce evidence as hard as possible. This applies to the overwhelming majority of members of our highest lawmaking body. Incidentally, knowing the present composition of Parliament, I think that the very fact of which Mr. Azarov was speaking really took place, but the number of people he mentioned is just guesswork. Will this statement give fresh impetus to fighting corruption? What is needed to fight negative things in this country is not impetuses but well-planned and purposeful work. I am sure that even if evidence is ever presented with respect to our businessmen-legislators, this will show only a very small number of them. On the other hand, if, according to Mr. Azarov, some Deputies are engaged in business activities, it is strange to suspect them of obstructing the passing of laws aimed at putting the tax sphere in order. It is entrepreneurs who are most interested in the transparency and purity of tax-related relations, for this would enable them to defend their interests.”
Petro POROSHENKO, People’s Deputy (Solidarity):
“Frankly, I find it difficult to comment on statements made in such a way. I think this will be followed by the submission of the relevant materials to the Prosecutor General’s Office or to Parliament for analysis and consequent decisions. Who did the State Tax Administration mean, what conclusions will be drawn, what questions will law enforcement bodies have about such commercial activity; is there any evidence of corruption in this activity? Unfortunately, there are now more questions than answers. So far, we can only analyze on the basis of rumor and innuendo, and I don’t want to do this.
“Simultaneously, I am absolutely convinced that the problem of corruption today touches upon, above all, the executive bodies of power because it is they that have most opportunities to carry out certain acts of malfeasance. As we see, legislative bodies are now debating bills prepared by the government and aimed at pushing Ukraine down the path of reforms. Yet, we don’t see today any genuine reforms in executive law enforcement bodies, especially in the provinces, at the level of local government. I would advise looking for corruption precisely there.”
Anatoly MATVIYENKO, People’s Deputy:
“I believe this is a well-considered, consistent and new step, for no one says precisely who is abusing power: an overall negative image of Parliament is being created. It is dangerous when one does not understand that the state is united and indivisible, and the arbitrary division of the latter into three branches, as well as the system of checks and balances, only exists to strengthen, rather than weaken, this unity. If we want to pull Ukraine out of the abyss all of us helped it fall into, we must become aware that each link should be strong.
“I favor personal criticism, while this kind of sweeping criticism only shows a desire to dissolve Verkhovna Rada. Do you really think the next Parliament will be any better? No, it will be worse, for, in my opinion, the Deputies’ corps has been tending to decline in quality. Incidentally, evidence of this is the cynical buying of Deputies, i.e., paid-for transfers from one faction to another.”
