The Ukrainian Parliament adopts a a new tax code

Yesterday the Verkhovna Rada, Ukraine’s parliament, passed a revised version of the tax code incorporating changes suggested by President Yanukovych.  On November 30th, the President vetoed the tax code in response to a wave of protests from small and medium businesses. The main concern of the protesters related to restrictions on the simplified taxation of small businesses, an issue resolved in the updated version of the tax code. The new version leaves simplified taxation of the small business almost unchanged and restricts tax administration authorities compared to the previous version of the code. We anticipate that the new tax code will not substantially affect the budget’s overall performance in the next year and see the fiscal deficit at 4%-5% of GDP in 2011F, which is in keeping with IMF requirements.