Kyiv’s Maidan has been gathering over 10,000 people from all over Ukraine on each day of the previous week. Those were mainly entrepreneurs, rallying against the adoption of the new Tax Code. The protesters demand the president to veto the notorious Tax Code which, they assert, is neglecting the voice of the tax payers and enables the Tax Inspectorate to act uncontrollably. They also demand that a new version of the tax code be drafted, with broad involvement of small and middle business associations and scholars. The action shows that the Ukrainians are tired of abuses on part of the high echelons of power and it seems to be the beginning of a breakthrough that has not been highlighted by the global media to sufficient extent as yet.
“We are going to fight tooth and nail,” said Roman from Tatarbunary, Odesa oblast. “It is not fair taxes that we protest against; it is the lawless taxation and the use of administrative pressure, which force us to bribe officials. Every day, instead of mapping out a strategy for my business, I think, ‘What else are they going to take away from me?’”
People from all over Ukraine have come to stand up for their economic liberties. There is no division into east or west. They all have one common problem. Ukrainian flags bearing names of various cities and towns flap all over the Maidan.
These people are often accused of being hucksters who will not pay taxes. President Viktor Yanukovych even went as far as to call them “corruptionists.”
“I am prepared to pay taxes, but everything must be transparent, everyone should pay taxes,” said an indignant Volodymyr from Bila Tserkva. “There are entrepreneurs, and there are the self-employed. I am self-employed. You can incorporate me in the general tax system, and yet I do not make 300,000 hryvnias per year. I am ready to pay contributions to the Pension Fund and other taxes, but why do I have to be incorporated? It means that I have to work for three days, and get the accountancy done for four.
“And where am I supposed to take certificates for the goods I have purchased: at Kharkiv, Khmelnytsky, Chernivtsi, or Odesa? [big wholesale markets where retail traders mostly purchase their goods. – Ed.] Besides, this Tax Code affects not only entrepreneurs. Take the village. Everything is taxable, from poultry to fences to houses.”
Economists cannot find justice in the new Tax Code either. According to the statement made by the Union of Economists of Ukraine (VSVE), none of their suggestions concerning the systemic taxation reform based on the principle of economic patriotism, fair distribution of tax load, and creation of the best imaginable conditions for the development of entrepreneurship, were reflected in the Tax Code passed by the parliament on November 19.
“VSVE emphasizes the high probability of grave negative social and economic consequences for the national economy in the event of enacting the present Code,” reads the statement. The VSVE scholars believe that such a crucial document as the Tax Code should have been adopted only after a serious independent nationwide scholarly consideration, at relevant conferences and roundtable debates, rather than after some obscure lobby talks and a parody of nationwide discussion.
Over the past few days the participants of the protest action had an opportunity to make their standpoint known to the authorities: the First Deputy Prime Minister Andrii Kliuiev, and the first deputy head of the Presidential Administration Iryna Akimova. However, at the meeting with the entrepreneurs the latter said that the administration did not have the text of the new Tax Code at its disposal, as it was still in parliament.
“We emphasize that such destabilizing steps are intolerable. We also inform the government of the lawless practices that have already been launched by the tax administration,” relates Natalia Kozhevina, representative of the entrepreneurs in the negotiations, president of the Ukrainian Association of Business Incubators and Innovation Centers, member of the Council of Entrepreneurs under the Cabinet of Ministers. “The people are outraged not only by the prospects of the new Tax Code, but also by the present circumstances.” According to Kozhe-vina, today the regime is destroying the development of small and medium businesses without providing people with any alternative means of subsistence.”
Kozhevina told The Day that in the course of the negotiations, the representatives of small and medium businesses were trying to explain to the government that the Tax Code would result in the destabilization of the national economy, and that the government was now engaged in a dangerous game with entrepreneurs. “When those officials listen to our arguments, they all nod in agreement, even Kliuiev,” said she. “But then, they start some obscure wrangles and ruses. This is inadmissible. The problem is not so much in the size of taxes as in the lack of method set down in the Code.”
Yet despite this critical situation, Kozhevina still supports the idea of negotiations, and is ready to keep persuading the government not to destroy small and medium businesses. “We have analyzed every single paragraph of the Tax Code we are unhappy with. That is to say, the single tax is by far not the only contentious issue. We also raise the question concerning new social taxes, which are going to hit all Ukrainians starting January 1.”
Meanwhile, the coordination body of the entrepreneurs who are protesting on the Maidan in Kyiv has emphasized the inadmissibility of any compromise with the regime.
“We have no contacts with the government, Kliuiev in particular,” commented Oleksandr Danyliuk, member of the strikers’ organizing committee. “The talks with Kliuiev are the personal initiative of a part of the individuals who do not participate in the strike. They are not our delegates, that is why their meetings are not negotiations, they are rather consultations. They are not going to affect our movement in any way. We will not allow a split. Our standpoint is clear: if our demands are not fulfilled, we have initiated a signature-gathering campaign for an early dismissal of the Verkhovna Rada. The presidential veto on the Code is our categorical demand.”
Compromise is out of the question. “Each of us has half a dozen of amendments which would satisfy us, but together, there are seven hundred. They completely change the philosophy of this document. That is why it must be developed and passed anew. When the regime talks of some concessions today, it is not because it has learned to respect us, but just in order to divide our movement. But we are not going away, even if some clauses will be taken off the Code. In this event, there still will be some categories of entrepreneurs that will remain unsatisfied.”
Indeed, the government never abandoned the practice of blocking the protester’s passage to Kyiv, using every pretext imaginable. Each day there will be new messages about protesters’ bus motorcades being detained in this or other region. For example, there was an announcement during the rally on the Maidan that a motorcade from Lviv had not been able to leave that city, so the protesters had decided to hold a rally outside the oblast administration building. Even during the protest action on the Maidan, the city authorities do not block the traffic on Khreshchatyk. This is utter disrespect for the people. Can Bankova Str. offer any concessions? Even some Party of Regions’ members urge it to do so, for instance, Vasyl Khara, head of the Federation of Trade Unions of Ukraine, and Anatolii Kinakh, who leads the Ukrainian Union of Industrialists and Entrepreneurs. However, there has been no feedback from the authorities so far — unlike the participants of the protest action.
“There are lots and lots of entrepreneurs on the Maidan who pay taxes, and would like to pay them,” said Ihor Pylypchuk, head of media projects at the All-Ukrainian Center for Assisting Entrepreneurship. “However, the government’s current social and political policy and the methods of its implementation reduce people to mere surviving. That is why people are not going to put up with all the lies which Yanukovych used in his election campaign. They are looking forward to the promised five-year tax vacation for small and medium businesses without the return of extortions, censorship, etc. People want to live in dignity as representatives of Ukraine’s middle class.”
