 A 120-second look at trends and prognosis impacting the region |
Flat Tax Coming: That 13 percent flat tax rate for Ukraine might just be round the corner. This following its recent approval by the Rada. President Kuchma favors the reduced tax rate, now as high as 40 per cent of earnings.
- Under the current progressive tax system, the coffers have been bleeding revenue with many believing the rate is too steep to pay taxes. First Deputy Prime Minister Mykola Azarov believes that more revenues will come from personal income taxes than corporate when the new rate takes effect Jan. 1, 2004.
- Russia approved a similar arrangement two years ago and its tax revenue has increased considerably. President Kuchma is expected to sign the law into effect. One worry remains, however, that corporate social taxes will be boosted.
Ukraine Takes Part in Stabilization: Perhaps thinking of the negative publicity it has received in the West, Ukraine says it will take part in stabilization forces in the Polish sector of Iraq. This following a resolution of the UN Security Council which Ukrainian President Leonid Kuchma says leads him to believe Ukraine will take part in the after-war stabilization.
SARS Worries: The chairman for the State Committee on nationalization and migration issues is concerned about SARS reaching into Ukraine. Nothing specific, as yet, but he says better and more appropriate conditions are needed for illegal immigrant detention. Each year, Ukraine has about 27,000 illegal migrants.
Standard & Poors Ups Rating: High international reserves and a relatively strong export sector are being given as reasons for Standard & Poors upping Ukraine's rating from negative to stable. S&P said that growing exports will help the economy expand by three to four per cent over the next year, even if major structural forms continue to lag.
Inflation Eases: Despite an earlier and more rosier forecast from Ukraine's minister of economy, Ukraine's central bank says that the country's inflation will surpass the original forecast due to an increase in food prices. Under the best conditions, the bank now sees the inflation at 8 per cent in 2003, a two per cent increase than earlier thought.
- In the words of Anatoly Halchynski, head of the bank's supervisory board, the eight per cent increase is the bank's optimistic scenario based on a two per cent decline in consumer prices in June-August. He would not give the bank's less optimistic forecast.
Caspian Oil to Flow: Provided there is political support from the European Union, the first shipments of Caspian Sea crude may reach Europe via a Ukrainian pipeline by year-end. The pipeline, known as Odesa-Brody7, is set to diversity Europe's oil imports and make them environmentally friendlier by replacing supplies currently carried by oil tankers.
Strong Investor Interest Expected: Kyiv Mayor Oleksandr Omelchenko says the city will issue $105 million of Eurobonds and sell Hr 120 million of domestic municipal notes to mature in three to five years. He says the city expects strong demand from international investors. The money will be used to finance construction and repair within the city.
European Union possibilities increase for associate membership: This is the word from Borys Tarasiuk, head of the parliamentary committee for Euro-Atlantic integration. He says Ukraine may become an associate member of the European Union in four to six years after the election of the next president.
Ecology Ministers emphasize environmental protection: Ecology Ministers from six Carpathian countries--Ukraine, Serbia and Montenegro, Slovakia, Hungary, Romania and the Czech Republic-and representatives from the EU have passed a summary declaration at the Fifth Environment for Europe Conference in Kyiv.
- The declaration emphasizes the importance of this process as an instrument providing environmental protection and sustainable development in the region, as well as its contribution to the maintenance of peace and security in a broader context.
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Read also previous issue' articles:
Jean-Jacques Rousseau - an Idiot
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