In Ukraine, where tax evasion is a norm rather than a deviation, honest taxpayers are at a disadvantage. Institutional weakness of Ukraine requires a tax system that is as simple, straightforward and non-discretionary as possible – argues Volodymyr Dubrovskiy, expert of the LEV USAID project and the RPR.
Monthly Archive: June 2015
In March 2014, Forbes estimated that Ukraine had nine billionaires (measured in in U.S. dollars). This year, that number has dropped to five. The war has caused social and economic dislocations across Ukraine, making many ordinary Ukrainians poorer than before. It follows naturally that Ukraine’s wealthiest citizens would not be immune to asset loss, even if their plight remains much better than the bulk of their compatriots.
The iMoRe value for the 12th monitoring period (June 8th – 21st, 2015) stood at +1.1 points. This is out of a possible range from -5.0 to +5.0 points. The pace of reforms has been disappointingly slow for three consecutive periods. The only exception has been monetary policy, which has seen gradual progress.
Some of the tight capital controls introduced earlier this year recently were loosened by Ukrainian central bank, but the bulk of regulations will stay in place at least until September 2015. Yuriy Gorodnichenko argues that using capital controls without doing serious reforms to address the fundamental problems is not going to be helpful for Ukraine and can aggravate Ukraine’s problems in the long run.
Like many other developing countries, Ukraine has problems with protection and enforcement of the intellectual property (IP) rights. The empirical evidence to date suggests that the advantages reaped by enacting stronger IP protection outweigh the disadvantages, including the loss of imitative products and markets. While IP reform may seem a bitter pill, it is in Ukraine’s interest to swallow it.
Two countries are making headlines in Europe these days: Ukraine and Greece. Both countries are on the brink of defaulting on their debt. Greece has been in crisis for nearly six years, already had a major restructuring of public debt and an unusually large loan from the International Monetary Fund (IMF). Ukraine has been in crisis for “only” 1.5 years. Ukraine should learn from the Greek experience to avoid some of the worst calamities Greeks had to suffer.
US/EU-Russia relations have always been quite sensitive with numerous ups and downs in recent decades. The latest crisis in these relations occured in February 2014 due to unrest in Ukraine, which led to US/EU sanctions on Russia. The sanctions were imposed to create uncertainty for investors and lower their confidence leading to drop in stock prices and trading volumes. But did this expectation become a reality?
Ukraine looks set to receive the next round of IMF funding after accomplishing most of the 100 reforms stipulated by the IMF Memorandum for spring 2015. However, as long as the country relies on external pressure to generate the political will, comprehensive action on reforms will remain elusive.
Pervasive Russian propaganda appears to be quite effective not only in Russia itself, but also in some Western countries. In the second part of his article Andrii Tymofeiuk argues that Ukraine needs to prove that it is not and will never be a failed state and show its prospects.
A fundamental problem with Ukraine’s gas sector has been very low prices for consumption and domestic production by state-related companies, which have led to overconsumption and underproduction. However, Ukraine does not need to import gas or coal if it only offers normal market-economic conditions for the energy sector.