29 July 2014
Ukraine’s Cabinet of Ministers held a closed session on July 28 during which it reviewed amendments to the tax code and budget, as well as other legislative items to be considered by parliament on July 31, Vice Prime Minister Oleksandr Sych told a briefing. The session was led by Prime Minister Arseniy Yatsenyuk, who submitted a resignation letter on July 25 after failing to get parliamentary support for the measures. He declined to comment on his resignation.
Yatsenyuk told reporters that the Cabinet will resubmit to parliament the same items that didn’t muster a majority vote on July 24, warning that a repeated failure will cost the government USD 1.5 bln in Western loans. These items include a 1.5% income tax on wages to raise funds for the army, tax code amendments that will boost oil and gas royalties and reforms to the Ukrainian gas transit system, this time without the sale of its stakes, he said. The budget amendments will raise UAH 9.1 bln (USD 778 mln) for the army and UAH 3.3 bln (USD 282 mln) for the renewal of the destroyed infrastructure of Donbas. He lauded his Cabinet for finding the means to maintain social payments amidst the wartime demands.
“In the last package of laws that the government approved four months ago, we were able to tax only one oligarch by the name of Akhmetov,” Yatsenyuk said. “The production tax on ore was raised by four times. Now we want to additionally raise the royalty rates on oil, gas and everything that produces excess profit. All those who are earning excess profit in times of war are supposed to honestly and justly share.” he said.
With its failure to approve the July 24 legislation, parliament has stalled receiving USD 1 bln from the IMF and USD 500 mln from the World Bank, Yatsenyuk told the ICTV television network on July 28.
The budget’s funds for the army are exhausted and if parliament fails to approve the measures on July 31, Yatsenyuk said he will issue resolutions instead to unlock the funds, in violation of legal procedures.
“I’ll do everything – and I couldn’t care less what the prosecutors will tell me afterwards – in order to finance the army, soldiers, fill the gas tanks of tanks so that our soldiers have the ability to defend our country. Even without the law,” he said.
Zenon Zawada: We expect parliament will approve the legislation, with some adjustments, on July 31. It’s a positive sign that Yatsenyuk is continuing his work, with his resignation looking more like a threat now. The July 31 session will show whether it’s effective.