Editor’s note: This is issue 67 of Ukrainian lawmaker Yaroslav Zhelezniak’s weekly “Ukrainian Economy in Brief” newsletter, covering events from July 29- Aug. 4, 2024. The digest highlights steps taken in the Ukrainian parliament related to business, economics, and international financial programs.
The Kyiv Independent is republishing with permission.
Benchmarks and soft commitments in the memorandum with the IMF
Alternatives have been submitted to the government draft law on tax increase, the Parliament will probably prepare a revised version.
On Aug. 2, the legal deadline passed to submit alternative draft laws to the Cabinet of Minister's draft law #11416 on a tax increase.
Lawmaker Dmytro Razumkov and others submitted two alternative draft laws, which significantly reduces the chances that the Cabinet of Ministers will withdraw its version and instead gives the government the option to prepare a revised version of the draft law.
The government will most likely will use such a scenario. Doing so, gives the Cabinet the opportunity to change the text even before the first reading and collect enough votes for it (as we reported previously, there are not enough votes in the parliament for the current text).
Moreover, a revised version doesn’t allow lawmakers to submit alternative draft laws, which makes the process faster and would allow the Verkhovna Rada to consider the draft law in the first reading already in the second half of August (around Aug. 20).
The Cabinet of Ministers has already ordered requests from international partners for a list of candidates for Bureau of Economic Security commission.
The process of restarting the Bureau of Economic Security moves according to the schedule in the law. On July 26, the Secretariat of the Cabinet of Ministers ordered the Foreign Ministry to send letters to international partners with a request to submit their joint list of candidates for the competition commission to select the director of the bureau. Such letters should have been sent to the EU, governments of the U.S., U.K. and Canada, as well as to the OSCE and EUAM.
If everything goes according to the planned schedule, the competition commission for the selection of the new director of the bureau will soon start working.
Liliane Bivings
The Business Council opposes the Cabinet of Ministers' tax increase and demands the restart of the State Customs Service.
Ukrainian authorities organized meetings with Ukrainian business representatives to discuss draft law #11416 on a tax increase submitted by the Cabinet of Ministers. The Business Council, which is made up of Ukrainian businesses that meet regularly with the Presidential Office.
Among alternative ways to increase state budget revenues, representatives of the Business Council suggested several steps for reducing the shadow economy. Particularly, it was about the customs reform and fight against smuggling.
Fighting against the shadow market and tax optimization schemes were mentioned as well as the rejection of initiatives like cash back programs.
Obligations to the EU
Ex-Deputy of Energy Minister Halushchenko became the Chairman of the NCER.
During a closed meeting and secret ballot on Aug. 2, the members of the National Commission for State Regulation of Energy and Public Utilities (NCER) elected Yurii Vlasenko as the Chairman of the NCER.
Since May 2021, Vlasenko worked as a deputy for the Energy Minister Herman Halushchenko.
In 2022, Vlasenko signed an order by which state coal at reduced prices was sold not only to state companies, but also to several private companies, who sold it to customers for full market price. According to our information, Vlasenko implemented a scheme designed by Energy Minister and deputy head of the Presidential Office Rostyslav Shurma. All documents within this case will be submitted to the NABU.
The appointment of Vlasenko as the Chairman of the NCER became possible as the selection commission consists of three representatives of the Energy Committee of the VRU, one representative of the Energy Ministry and one representative of the Regional Development Ministry. None of its members was delegated by international partners of Ukraine.
With the appointment of Vlasenko there are five out of seven members of the NCER, including its Chair, that are loyal to Rostyslav Shurma and Herman Halushchenko despite the fact that Ukraine has to ensure the independence of the NCER by the end of the year according to Ukraine Plan within the EU mechanism of financial support Ukraine Facility.
Martin Fornusek
