Major protest in Kiev at tax law

THOUSANDS OF Ukrainian businessmen protested yesterday against a new tax law that they say will destroy their livelihoods while protecting the tycoon supporters of president Viktor Yanukovich.

The demonstration briefly paralysed the centre of the capital, Kiev, and was the most strident expression of opposition against Mr Yanukovich since he took power from pro-Western leaders in February and set about repairing Ukraine’s relations with its neighbour and traditional ally, Russia.

More than 5,000 people denounced the new tax code, which Mr Yanukovich’s government says is vital to plug holes in its budget and aid the country’s ailing economy, but which critics insist places a huge burden on small businesses while leaving the richest “oligarchs” untouched.

Chanting “Shame! Shame!” and carrying banners saying “No to fiscal terror”, the protesters massed on Kiev’s Independence Square, surrounded by riot police, and urged Mr Yanukovich to use his powers of veto to block a Bill that parliament has already approved.

The new tax code will dramatically increase the number of small businesses that will have to submit details of their operations to state tax inspectors, and pay 25 per cent of their profits in tax instead of making fixed payments.

This will immediately apply to large numbers of Ukraine’s emerging but hard-pressed middle class, who until now have made monthly ad hoc payments to district tax inspectors. It will also have no impact on the billionaire tycoons who run the country’s largest enterprises, many of whom are closely linked to Mr Yanukovich and his party.

“I have worked three shifts at a plant for 40 years and now I get a pension of 700 hryvnias (€64) a month, and the government still wants money from me,” said one protester, Tamara Boikovich (60), who sells fruit and vegetables in Kiev. “I will quit this business [if the new tax code takes effect]. To hell with it! I will ‘move into the shadows’. I will paint walls for the rich and will pay no taxes at all.”

Mr Yanukovich said: “Some people stand to lose, one must admit this . . . About 300,000 will have to switch to stricter reporting and taxation. This is inconvenient and unpleasant. [But] all countries have gone through this.”