A budget item was heard in the second reading by the Verkhovna Rada on February 17 in the presence of the Cabinet and Premier Yushchenko invited to the parliamentary sitting. Oleksandr Turchynov, reporting on behalf of the budget committee, said all disputable budget items had been agreed upon by the consensus committee and proposed a package vote, yet the legislators preferred an item-by-item procedure. As a result, all points on which the majority failed to establish a balance of interests became obvious: Innovation Fund, tax concessions, excise tax, and Tax Administration subsidies.
As was to be expected, Article 62 substantially reducing tax concessions for various categories of the citizenry proved the most objectionable. The Cabinet’s stand was stated by Finance Minister Ihor Mitiukov: “Securing all the existing tax concessions is unrealistic. Suppose we leave these privileges only for those categories of citizens we can actually secure.” The proposal did not pass, one reason perhaps being that every lawmaker’s prospect of reelection would be determined by his/her approach to tax exemptions.
Objections to Article 69, stipulating the amount of subsidies for the Tax Administration as depending on the amount collected, as tax payments were formulated by Viktor Pynzenyk (Reforms & Order): “We have decided that no government agencies will be financed subject to special procedures.” Mr. Pynzenyk believes that applying such procedures to the tax people will only worsen Ukraine’s business climate.
Apparently, Article 69 was one of the items (its importance was confirmed to The Day by Mr. Turchynov) in the package vote, the rest being budget income and expense items. After voting it down, the Verkhovna Rada audience was visibly transformed into a gathering of lobbyists, with some calling for support of livestock breeding, others referring to the coal industry, construction, production of medicines, etc. Speaker Ivan Pliushch had no choice but to call a recess, so the majority could agree on the disputed items. During the intermission Oleksandr Turchynov reaffirmed that the divisive issue had been settled by a meeting of faction leaders. If so, the only logical assumption is that some People’s Deputies’ business concerns proved more important than factional discipline. Be it as it may, voting the budget turned out a test of strength for the majority and whether it could achieve a compromise. The majority passed muster. After another meeting of faction leaders the remaining budget items were put to a package vote and it was thus Parliament approved the budget.
