Not many British Business Club members arrive in Kyiv having ridden by motorbike all the way from England. Arriving in Kyiv city centre yesterday, Derek Mansfield – President of Bold Endeavours a company that specialises in Internet Marketing, was already attracting on lookers in Kreshatik Street. Within a few seconds of stopping at the road side, I heard one woman say to him “Can I have my photograph taken with you?”.
She has no idea who he is, but he looked famous/important/unusal and he was riding a big motorbike with British registration, so Derek was happy to oblige. Within a few minutes many people are looking on. Why not? It’s not every week a British man decides to hop on his motorbike and ride 1300 miles across Europe to visit one of his businesses and see his friends. He also has a story to tell about how he has over 25 years of driving/riding experience and has never had a problem with the police for speeding, but after crossing Germany, Austria, Slovakia without any problems he then enters UKRAINE. Within a few hours those gentlemen from the Ukraine Department of Automobile Inspection have taken a keen interest in Derek Mansfield and his big motorcycle on at least three occasions. Welcome to Ukraine Derek and well done for showing some British spirit of adventure, a real bold endeavour.
30 June 2010
Ukraine still a low cost economy (But only officially)
Average Wages Up By 4.4% in Ukraine to UAH 2,200 Per Month In May 2010.
In May, average wages went up by 4.4% or UAH 94 to UAH 2,201 per month, compared with April, the State Statistics Committee has informed.
The highest rate of average wages was registered in the city of Kyiv at UAH 3,293 per month.
Even at the highest rate in Kyiv, thats still just Euro 340 PER MONTH or GBP 276 PER MONTH. Average wages are still very low in Ukraine compared to other European countries. We all know that wages are also paid in the 'black economy' so these figures are always distorted from the real facts. But even if the average employee was getting another 100% in the black economy its still around Euro 680 per month or GBP 552 per month. Difficult to understand why more companies are not rushing to set up shop in Ukraine with such low wage costs?
Even then, many Ukrainian employers including the state fail to pay employees on time and we have what is called in Ukraine a wage arrears situation. (Can you imagine this in another country?)
As of June 1, 2010, the volume of unpaid salaries and wages rose by 11.1% compared to May 1, 2010, to UAH 1,887.023 million, the State Statistics Committee has informed.
As of June 1, 2010, the most considerable volumes of wage arrears were observed in Donetsk region amounting to UAH 362.514 million, UAH 171.810 million in Luhansk region, and UAH 167.797 million in Kharkiv region.
In May, the arrears of wages paid from the state and local budgets rose by 37.5%, compared to April, and totaled UAH 32.969 million as of June 1, 2010.
In particular, the arrears of wages paid from the state budget made up UAH 32.846 million, from local budgets UAH 0.123 million.
At the same time, the State Statistics Committee reported that, according to its operational data, in the period from June 1 to June 15, the economically active enterprises have paid wages arrears amounting to UAH 225.2 million.
Thus, the total amount of arrears as of June 15 amounted to UAH 1,661.8 million (97.9% as of May 1), and in the economically active enterprises - to UAH 1,073.8 million (97%).
The volume of unpaid salaries and wages rose by 11.1%........
ONLY IN UKRAINE.
Its sad that people in Ukraine put up with this. Little do they know that wage arrears are just totally unacceptable in countries like the UK.
In Ukraine employers openly tell employees..."We have no money" and employees continue to work.
It still brings a smile to my face when I think about what would happen in the UK, if you told your employees that "We have no money".
In May, average wages went up by 4.4% or UAH 94 to UAH 2,201 per month, compared with April, the State Statistics Committee has informed.
The highest rate of average wages was registered in the city of Kyiv at UAH 3,293 per month.
Even at the highest rate in Kyiv, thats still just Euro 340 PER MONTH or GBP 276 PER MONTH. Average wages are still very low in Ukraine compared to other European countries. We all know that wages are also paid in the 'black economy' so these figures are always distorted from the real facts. But even if the average employee was getting another 100% in the black economy its still around Euro 680 per month or GBP 552 per month. Difficult to understand why more companies are not rushing to set up shop in Ukraine with such low wage costs?
Even then, many Ukrainian employers including the state fail to pay employees on time and we have what is called in Ukraine a wage arrears situation. (Can you imagine this in another country?)
As of June 1, 2010, the volume of unpaid salaries and wages rose by 11.1% compared to May 1, 2010, to UAH 1,887.023 million, the State Statistics Committee has informed.
As of June 1, 2010, the most considerable volumes of wage arrears were observed in Donetsk region amounting to UAH 362.514 million, UAH 171.810 million in Luhansk region, and UAH 167.797 million in Kharkiv region.
In May, the arrears of wages paid from the state and local budgets rose by 37.5%, compared to April, and totaled UAH 32.969 million as of June 1, 2010.
In particular, the arrears of wages paid from the state budget made up UAH 32.846 million, from local budgets UAH 0.123 million.
At the same time, the State Statistics Committee reported that, according to its operational data, in the period from June 1 to June 15, the economically active enterprises have paid wages arrears amounting to UAH 225.2 million.
Thus, the total amount of arrears as of June 15 amounted to UAH 1,661.8 million (97.9% as of May 1), and in the economically active enterprises - to UAH 1,073.8 million (97%).
The volume of unpaid salaries and wages rose by 11.1%........
ONLY IN UKRAINE.
Its sad that people in Ukraine put up with this. Little do they know that wage arrears are just totally unacceptable in countries like the UK.
In Ukraine employers openly tell employees..."We have no money" and employees continue to work.
It still brings a smile to my face when I think about what would happen in the UK, if you told your employees that "We have no money".
28 June 2010
Constitution Day - A Public Holiday in Ukraine
Yes, another public holiday in Ukraine today.
Although I'm sure most people do not remember why?
Why on earth have a public holiday to celebrate Constitution Day?
Who cares? Let's be honest here.
Although I'm sure most people do not remember why?
Why on earth have a public holiday to celebrate Constitution Day?
Who cares? Let's be honest here.
Number of immigrant workers in the UK to be capped
Today (Monday 28 June 2010) the British Home Secretary – Theresa May, announced officially that the government will introduce strict controls on the number of Non-EU immigrants coming to the UK.
Latest figures show that a total of 54,500 non-EU economic migrants came to the UK in 2009. A further 273,000 visas were issued to foreign students and another 38,000 people were allowed in to be reunited with their family, many coming from the Indian sub-continent.
So, we can only assume from this announcement that the visa procedures at UK Border Agency/UK Visa Offices will become more difficult for Ukrainian people intending to travel to the UK on business trips and on holidays. I’m sure the situation will also be made more difficult for students wanting to study in the UK.
But, let’s face reality. There are far too many people living in the UK and far too many people eager to settle there. The UK is still considered a ‘dream destination’ for many illegal immigrants as they know that UK laws will protect them. I cannot think of any other EU country that is so ‘soft’ on illegal immigrants. Moreover, the benefits system in the UK is more generous than say Italy, France, Spain who refuse to give out money so easily to immigrants.
Likewise the other reality is that many Ukrainian citizens will still continue to travel to the UK for business purposes and as tourists. The vast majority of these people have no intentions of ever wanting to stay in the UK. So let’s hope the UK Border Agency people are smart enough to deal with visa applications is a sensible manner.
Latest figures show that a total of 54,500 non-EU economic migrants came to the UK in 2009. A further 273,000 visas were issued to foreign students and another 38,000 people were allowed in to be reunited with their family, many coming from the Indian sub-continent.
So, we can only assume from this announcement that the visa procedures at UK Border Agency/UK Visa Offices will become more difficult for Ukrainian people intending to travel to the UK on business trips and on holidays. I’m sure the situation will also be made more difficult for students wanting to study in the UK.
But, let’s face reality. There are far too many people living in the UK and far too many people eager to settle there. The UK is still considered a ‘dream destination’ for many illegal immigrants as they know that UK laws will protect them. I cannot think of any other EU country that is so ‘soft’ on illegal immigrants. Moreover, the benefits system in the UK is more generous than say Italy, France, Spain who refuse to give out money so easily to immigrants.
Likewise the other reality is that many Ukrainian citizens will still continue to travel to the UK for business purposes and as tourists. The vast majority of these people have no intentions of ever wanting to stay in the UK. So let’s hope the UK Border Agency people are smart enough to deal with visa applications is a sensible manner.
BBC Radio - Thank You
I was so busy yesterday, I decided to just listen to the Germany v England match on BBC Radio 5 Live. I'm so happy I did this. As it turned out it may have been too painful to watch on TV.
Come to think of it, I know many people criticise the BBC, but they still deliver a great service all around the world. Even as I write this, I am listening to BBC Radio 4 thanks to the internet and the BBC iPlayer system.
The BBC is still seen as a beacon by media organisations around the world and a great example to follow.
Come to think of it, I know many people criticise the BBC, but they still deliver a great service all around the world. Even as I write this, I am listening to BBC Radio 4 thanks to the internet and the BBC iPlayer system.
The BBC is still seen as a beacon by media organisations around the world and a great example to follow.
27 June 2010
Khoroshkovsky - The right man for the job.
Valeriy Khoroshkovsky – Head of the SBU (State Security Service of Ukraine).
As I have said many times before, the media should stop trying to find a problem with Valeriy Khoroshkovsky and focus on the real work the SBU is now undertaking to fight corruption and other criminal activities in Ukraine. Let’s face it the Police and Ministry of Internal Affairs have done very little in the past.
Under the new leadership of Khoroshkovsky the SBU will get results and bring many people to justice. We will not find cases being dragged on forever, hoping that someone will just forget about it, as previously.
Khoroshkovsky will focus on getting results and he is very good at this. Moreover, it’s maybe a good thing having a multimillionaire as Head of the State Security Service. He does not need to take any bribes from anyone. He does not need to cover up anything.
Admittedly he knows how to use media and press conferences to full effect and why not. This past week has shown a few examples of the work carried out by the SBU in Ukraine.
Here are some examples:
Olympiysky National Sport Complex. This complex is currently under development in preparations for the Euro 2012 Games. No surprise maybe that the former Director General of the complex has been charged with embezzling UAH 10.8million (Approx USD1.4m). We know that many Ukrainians just cannot help themselves from stealing money.
Rodovid Bank. The SBU detained the former administrator of the bank and charged him with embezzling UAH 340 million (Approx USD43m) – Apparently USD38m of this was paid to a firm for ‘legal services’.
Naftogaz Ukraine. Ihor Didenko the former First Deputy CEO of Naftogaz Ukraine has signed an undertaking not to leave the city of Kyiv, after being charged with embezzlement relating to 11 billion cubic metres of gas, involving UAH33.9 billion.
The former Head of the State Customs Service of Ukraine- Anatoly Makarenko was also arrested on 23 June in relation to the same charges.
Feedback I have from people doing business where government officials are involved is that government employees are very afraid now. They are worried about who is watching them and they think that every transaction is an ‘SBU sting operation’ designed to catch them being involved in corruption.
From our point of view (normal western thinking I mean), we would say, why worry?. If you are not doing anything illegal?. Sadly the situation is different in that the vast majority of government employees including their bosses rely heavily on the ‘extra payments’ they receive everyday as part of their job. Losing this extra income will be difficult for them. But this will be the painful process of trying to fight corruption in Ukraine. Not easy.
As I have said many times before, the media should stop trying to find a problem with Valeriy Khoroshkovsky and focus on the real work the SBU is now undertaking to fight corruption and other criminal activities in Ukraine. Let’s face it the Police and Ministry of Internal Affairs have done very little in the past.
Under the new leadership of Khoroshkovsky the SBU will get results and bring many people to justice. We will not find cases being dragged on forever, hoping that someone will just forget about it, as previously.
Khoroshkovsky will focus on getting results and he is very good at this. Moreover, it’s maybe a good thing having a multimillionaire as Head of the State Security Service. He does not need to take any bribes from anyone. He does not need to cover up anything.
Admittedly he knows how to use media and press conferences to full effect and why not. This past week has shown a few examples of the work carried out by the SBU in Ukraine.
Here are some examples:
Olympiysky National Sport Complex. This complex is currently under development in preparations for the Euro 2012 Games. No surprise maybe that the former Director General of the complex has been charged with embezzling UAH 10.8million (Approx USD1.4m). We know that many Ukrainians just cannot help themselves from stealing money.
Rodovid Bank. The SBU detained the former administrator of the bank and charged him with embezzling UAH 340 million (Approx USD43m) – Apparently USD38m of this was paid to a firm for ‘legal services’.
Naftogaz Ukraine. Ihor Didenko the former First Deputy CEO of Naftogaz Ukraine has signed an undertaking not to leave the city of Kyiv, after being charged with embezzlement relating to 11 billion cubic metres of gas, involving UAH33.9 billion.
The former Head of the State Customs Service of Ukraine- Anatoly Makarenko was also arrested on 23 June in relation to the same charges.
Feedback I have from people doing business where government officials are involved is that government employees are very afraid now. They are worried about who is watching them and they think that every transaction is an ‘SBU sting operation’ designed to catch them being involved in corruption.
From our point of view (normal western thinking I mean), we would say, why worry?. If you are not doing anything illegal?. Sadly the situation is different in that the vast majority of government employees including their bosses rely heavily on the ‘extra payments’ they receive everyday as part of their job. Losing this extra income will be difficult for them. But this will be the painful process of trying to fight corruption in Ukraine. Not easy.
Winners BBCU Golf Day
Saturday 26th June was a great day out for the British Business Club in Ukraine. The weather was on our side and we enjoyed our annual BBCU Golf Day.
This was not just a day for golf players, oh no. We successfully managed to convince many of our members to come along and try the game of golf. So many people turned out, we were afraid we would run out of available golf clubs. Maybe the reason we had such a great turnout was due the fact that we reduced the entrance fees as much as we could, to show people that Golf is not just a game for the rich in Ukraine. We feel that too many people still want it to be a game for the elite. Golf can be enjoyed by many people.
One of the reasons we introduced ‘Pay as you Play’ at Royal Kyiv Golf Club was to attract people to come along without the burden of very high membership fees. So far our strategy is working. Many of our members now know what is a ‘Driving Range’, ‘Putting Green’, ‘Chipping Green” and the difference between a ‘wood’, ‘putter’ and ‘wedge’ etc. Moreover, they actually played golf for the first time.
The winners for the day. Having just returned from watching the US Open, local expat in Kyiv, Stuart McKenzie was the outright winner of the BBCU Golf Day Tournament. (Just 9 over par). Plus in the afternoon he succeeded further by capturing the trophy for the ‘Texas Scramble’. (Team of three players, one good player, one average and one beginner).
One of the most interesting tournaments for our beginners was the BBCU Academy Tournament, played on a special six hole course designed for beginners.
The winner – Sergey Maklakov with a score of 24 (just 6 over par) was delighted to take away the Academy Trophy.
Congratulations to all our winners and to all those brave enough to try the game for the first time. I would like to thank many of the people who made the day a great success including our Director of Golf – Mr Bill Bennett and his wife Svetlana, Peter Flanighan, Dina Melynk and Mr Clem Young – Director of Golf at Royal Kyiv Golf Club and his partner Olga Sokolova.
The day was also enjoyable thanks to the great BBQ kindly supplied by Mr Peter Davis.
Peter is another well known expat in Kyiv and we thank him very much for the support provided by his catering team.
I started the day by explaining to people that the game of golf is like a drug. Once you get the taste, you want more and want to keep getting more. Now we need to find enough golf instructors for all those now wanting to have regular lessons.
This was not just a day for golf players, oh no. We successfully managed to convince many of our members to come along and try the game of golf. So many people turned out, we were afraid we would run out of available golf clubs. Maybe the reason we had such a great turnout was due the fact that we reduced the entrance fees as much as we could, to show people that Golf is not just a game for the rich in Ukraine. We feel that too many people still want it to be a game for the elite. Golf can be enjoyed by many people.
One of the reasons we introduced ‘Pay as you Play’ at Royal Kyiv Golf Club was to attract people to come along without the burden of very high membership fees. So far our strategy is working. Many of our members now know what is a ‘Driving Range’, ‘Putting Green’, ‘Chipping Green” and the difference between a ‘wood’, ‘putter’ and ‘wedge’ etc. Moreover, they actually played golf for the first time.
The winners for the day. Having just returned from watching the US Open, local expat in Kyiv, Stuart McKenzie was the outright winner of the BBCU Golf Day Tournament. (Just 9 over par). Plus in the afternoon he succeeded further by capturing the trophy for the ‘Texas Scramble’. (Team of three players, one good player, one average and one beginner).
One of the most interesting tournaments for our beginners was the BBCU Academy Tournament, played on a special six hole course designed for beginners.
The winner – Sergey Maklakov with a score of 24 (just 6 over par) was delighted to take away the Academy Trophy.
Congratulations to all our winners and to all those brave enough to try the game for the first time. I would like to thank many of the people who made the day a great success including our Director of Golf – Mr Bill Bennett and his wife Svetlana, Peter Flanighan, Dina Melynk and Mr Clem Young – Director of Golf at Royal Kyiv Golf Club and his partner Olga Sokolova.
The day was also enjoyable thanks to the great BBQ kindly supplied by Mr Peter Davis.
Peter is another well known expat in Kyiv and we thank him very much for the support provided by his catering team.
I started the day by explaining to people that the game of golf is like a drug. Once you get the taste, you want more and want to keep getting more. Now we need to find enough golf instructors for all those now wanting to have regular lessons.
24 June 2010
Made in South Korea
On Tuesday night I was invited with some friends to watch the World Cup game between Nigeria and Korea. We were invited to ‘Hotel Slavutych’ on the left bank of the river in Kyiv. This hotel was built during Soviet Union times and I had only visited once many years before. It is not a hotel you normally associate with good service.
However, we had been invited by our friends from the “Korean Community’ in Ukraine.
Our Koreans friends are also good golfers. In fact come to think of it, they are good at most things. We were taken to the 16th (top floor) of the hotel. On arrival I was amazed as to the environment we were entering. It was like entering a typical Korean club.
In fact I was to discover that it was called the “Korean Business Centre” complete with sliding doors to each room. The whole place was buzzing with Korean families getting ready to watch the many TV screens around the whole of the 16th floor supplied of course by companies like LG and Samsung.
We were greeted at the entrance by Lim Myung Jin – General Manager of the Korean Business Centre. We were also presented with red T-shirts courtesy of the Korean Football Association, which we were expected to change into from our normal shirts. We were then dressed like everyone else in the ‘centre’ including women and children.
We were greeted with great enthusiasm by our hosts and shown to a table, where service was provided very quickly by local Ukrainian staff. (We all knew this was very unusual. the fast service that is). Plus, Koreans being so smart, they had organised a direct link via the internet so they could watch the game with Korean commentary.
But it was a little funny as the internet link proved to be about 2 minutes slower than the local TV station showing the game on the next screen. Some time later the TV with the Korean commentary was moved to one side and the local TV screen was given prominent position much to the applause of the Korean crowd.
On visiting the centre I couldn’t help but notice that one room had a sign ‘Golf Simulator’. During the football interval I was invited to play on the Golf Simulator and it was interesting to find out why our Korean friends are so good on the golf course.
Also joining our table was Park Robyug – Ambassador of the Republic of Korea – in Ukraine. We were impressed by how Koreans stood up when the Korean national anthem was played at the beginning of the game and how exciting it was at goal scoring time. Although the match ended in a 2-2 draw it was a great night at the Korean Business Centre. This was the first time my wife and I had tried Korean food and we can recommend it as very tasty. The Koreans are people that just seem to make things happen and we were reminded of this during the commercial breaks on local Ukraine TV, most of the Korean companies had taken full opportunity to advertise on TV.
The Korean company – Kia Motors must have invested heavily in the 2010 World Cup in South Africa. I just found out they supplied all the vehicles for the official transport in South Africa, over 200 buses and other vehicles etc.
Plus many of the South Korean companies in Ukraine are already market leaders in many sectors including of course the electronics, mobile phone, home entertainment consumer markets. Maybe we can beat them at golf this weekend. Oh..and well done to Bill Bennett our Director of Golf for organizing this event.
However, we had been invited by our friends from the “Korean Community’ in Ukraine.
Our Koreans friends are also good golfers. In fact come to think of it, they are good at most things. We were taken to the 16th (top floor) of the hotel. On arrival I was amazed as to the environment we were entering. It was like entering a typical Korean club.
In fact I was to discover that it was called the “Korean Business Centre” complete with sliding doors to each room. The whole place was buzzing with Korean families getting ready to watch the many TV screens around the whole of the 16th floor supplied of course by companies like LG and Samsung.
We were greeted at the entrance by Lim Myung Jin – General Manager of the Korean Business Centre. We were also presented with red T-shirts courtesy of the Korean Football Association, which we were expected to change into from our normal shirts. We were then dressed like everyone else in the ‘centre’ including women and children.
We were greeted with great enthusiasm by our hosts and shown to a table, where service was provided very quickly by local Ukrainian staff. (We all knew this was very unusual. the fast service that is). Plus, Koreans being so smart, they had organised a direct link via the internet so they could watch the game with Korean commentary.
But it was a little funny as the internet link proved to be about 2 minutes slower than the local TV station showing the game on the next screen. Some time later the TV with the Korean commentary was moved to one side and the local TV screen was given prominent position much to the applause of the Korean crowd.
On visiting the centre I couldn’t help but notice that one room had a sign ‘Golf Simulator’. During the football interval I was invited to play on the Golf Simulator and it was interesting to find out why our Korean friends are so good on the golf course.
Also joining our table was Park Robyug – Ambassador of the Republic of Korea – in Ukraine. We were impressed by how Koreans stood up when the Korean national anthem was played at the beginning of the game and how exciting it was at goal scoring time. Although the match ended in a 2-2 draw it was a great night at the Korean Business Centre. This was the first time my wife and I had tried Korean food and we can recommend it as very tasty. The Koreans are people that just seem to make things happen and we were reminded of this during the commercial breaks on local Ukraine TV, most of the Korean companies had taken full opportunity to advertise on TV.
The Korean company – Kia Motors must have invested heavily in the 2010 World Cup in South Africa. I just found out they supplied all the vehicles for the official transport in South Africa, over 200 buses and other vehicles etc.
Plus many of the South Korean companies in Ukraine are already market leaders in many sectors including of course the electronics, mobile phone, home entertainment consumer markets. Maybe we can beat them at golf this weekend. Oh..and well done to Bill Bennett our Director of Golf for organizing this event.
UK Budget 2010 - Highlights
The UK Budget – Highlights
Corporation tax rates
Finance Bill 2010 will include legislation to reduce the
main rate of corporation tax from 28% to 27% from
1 April 2011. Further reductions to the main rate are
proposed to reduce the rate by 1% per year to 24% by
1 April 2014. Corporation tax on ‘ring-fenced’ profits
from UK oil extraction and oil rights will remain at 30%.
In addition, Finance Bill 2011 will introduce legislation
to reduce the small profits rate from 21% to 20% from
1 April 2011.
Comment: OK not too bad. But I think the UK Government
Should remember that it’s the private sector that ‘Brings home the Bacon”,
So do not tax them to much.
Tax credits and welfare reform
In accordance with the Government’s stated focus on
spending reductions outweighing tax increases, the
Chancellor announced a number of reductions to tax
credits and welfare benefits.
From April 2011, tax credit eligibility will be reduced for
families with household income above £40,000. The
Government will make further changes in 2012-2013
with the aim of focusing tax credits on lower income
families. In addition, child benefit will be frozen for three
years from April 2011.
Comment: Good move. Far too many families receive tax
Credits (old Family allowance) who do not really need it.
Give the money to poor families.
Personal taxes
Income tax allowance and basic rate limit
With effect from 6 April 2011, the personal allowance
for individuals aged under 65 years of age will increase
to £7,475 but the basic rate limit will be reduced so
that higher rate taxpayers will not benefi t. It is unclear
at this stage whether this represents a real tax increase
for individuals over £100,000 who will have had their
personal allowances withdrawn.
Comment: No real change here, but the UK is still a high tax
Nation (the new government claim otherwise).
Why have they not scrapped the 50% tax rate for high
Earners introduction by the previous Labour Government?
Capital gains tax (CGT)
From 23 June 2010, the rate of CGT will increase from
18% to 28% for higher rate tax payers. The rate of CGT
will remain at 18% where a taxpayer’s total income
(including gains) does not exceed the upper limit of the
income tax basic rate band. For trustees and personal
representatives of deceased persons, the normal rate
will be 28%. However, annual exemption limits will not
be reduced (currently £10,100).
To support investment in enterprise, the Government
announced it will extend the lifetime-gains limit for
entrepreneurs’ relief from £2m to £5m. This relief
provides for certain qualifying gains to be taxed at 10%.
This increase is effective from 23 June 2010.
Comment: Not good.
Indirect taxes
VAT
The standard rate of VAT will be increased from
17.5% to 20% from 4 January 2011. Anti-forestalling
legislation will have effect from 22 June 2010 to counter
arrangements that seek to apply the 17.5% rate to
goods and services to be delivered or performed after
4 January 2011.
Comment: Very bad idea. But the country is desperate
For income.
Overall it makes me think that the UK Government employs far too many people.
During the past 13 years the country has been drifting towards becoming a socialist state. I just hope the new government can steer the country back on the road to a free enterprise economy based on capitalism.
Corporation tax rates
Finance Bill 2010 will include legislation to reduce the
main rate of corporation tax from 28% to 27% from
1 April 2011. Further reductions to the main rate are
proposed to reduce the rate by 1% per year to 24% by
1 April 2014. Corporation tax on ‘ring-fenced’ profits
from UK oil extraction and oil rights will remain at 30%.
In addition, Finance Bill 2011 will introduce legislation
to reduce the small profits rate from 21% to 20% from
1 April 2011.
Comment: OK not too bad. But I think the UK Government
Should remember that it’s the private sector that ‘Brings home the Bacon”,
So do not tax them to much.
Tax credits and welfare reform
In accordance with the Government’s stated focus on
spending reductions outweighing tax increases, the
Chancellor announced a number of reductions to tax
credits and welfare benefits.
From April 2011, tax credit eligibility will be reduced for
families with household income above £40,000. The
Government will make further changes in 2012-2013
with the aim of focusing tax credits on lower income
families. In addition, child benefit will be frozen for three
years from April 2011.
Comment: Good move. Far too many families receive tax
Credits (old Family allowance) who do not really need it.
Give the money to poor families.
Personal taxes
Income tax allowance and basic rate limit
With effect from 6 April 2011, the personal allowance
for individuals aged under 65 years of age will increase
to £7,475 but the basic rate limit will be reduced so
that higher rate taxpayers will not benefi t. It is unclear
at this stage whether this represents a real tax increase
for individuals over £100,000 who will have had their
personal allowances withdrawn.
Comment: No real change here, but the UK is still a high tax
Nation (the new government claim otherwise).
Why have they not scrapped the 50% tax rate for high
Earners introduction by the previous Labour Government?
Capital gains tax (CGT)
From 23 June 2010, the rate of CGT will increase from
18% to 28% for higher rate tax payers. The rate of CGT
will remain at 18% where a taxpayer’s total income
(including gains) does not exceed the upper limit of the
income tax basic rate band. For trustees and personal
representatives of deceased persons, the normal rate
will be 28%. However, annual exemption limits will not
be reduced (currently £10,100).
To support investment in enterprise, the Government
announced it will extend the lifetime-gains limit for
entrepreneurs’ relief from £2m to £5m. This relief
provides for certain qualifying gains to be taxed at 10%.
This increase is effective from 23 June 2010.
Comment: Not good.
Indirect taxes
VAT
The standard rate of VAT will be increased from
17.5% to 20% from 4 January 2011. Anti-forestalling
legislation will have effect from 22 June 2010 to counter
arrangements that seek to apply the 17.5% rate to
goods and services to be delivered or performed after
4 January 2011.
Comment: Very bad idea. But the country is desperate
For income.
Overall it makes me think that the UK Government employs far too many people.
During the past 13 years the country has been drifting towards becoming a socialist state. I just hope the new government can steer the country back on the road to a free enterprise economy based on capitalism.
22 June 2010
UK Budget 2010 - 22 June
It had to be done. I tough budget was delivered this afternoon in the UK by new Chancellor George Osbourne. A full report will be available tomorow but the headlines are:
1.Public sector pay - Has been frozen for 2 years.
2.VAT will be increased from 17.5% to 20% from 4 January 2011.
3.Capital Gains Tax will be increased from 18% to 28% from midnight tonight for higher rate tax payers
4.Benefits - Most of the benefits payable to unemployed people wil be frozen
5.Corporation tax will be reduced from 28% to 24% by 2014.
6.There were no significant increases in the 'normal taxes' on drink,petrol etc
Update tomorrow
1.Public sector pay - Has been frozen for 2 years.
2.VAT will be increased from 17.5% to 20% from 4 January 2011.
3.Capital Gains Tax will be increased from 18% to 28% from midnight tonight for higher rate tax payers
4.Benefits - Most of the benefits payable to unemployed people wil be frozen
5.Corporation tax will be reduced from 28% to 24% by 2014.
6.There were no significant increases in the 'normal taxes' on drink,petrol etc
Update tomorrow
What will happen to the Euro?
During the past months, I have been involved in transferring all my UK pensions’ funds out of the UK via a wonderful system called QROPS. As I have been an expat for more than five years, I can transfer all my pension funds to an overseas fund provided it is recognised by the UK authorities. So I decided to transfer all my funds to New Zealand. My financial ‘advisors’ claimed it would only take a few weeks! Yeh…sure, I have lived in Ukraine for the past seven years and I have heard this story so many times.
The transfer process has been going on for nearly 8 months now. One fund even decided to transfer the money by CHEQUE to New Zealand as they claim they did not have electronic transfer facilities…yeh sure…welcome to the 21st Century. Moreover, they also claimed the name of the fund I wanted to transfer the money to was TOO BIG to fit onto the cheque. For crying out loud…do they think we are all stupid? But they eventually sent a CHEQUE (Can you believe this) to New Zealand, who only had to send it back to the UK for clearance via a UK bank and the whole process is due to take 30 days for the cheque to clear.
It’s still amazing how UK pension fund managers will do anything to delay funds being transferred. It worries me that there is a big problem still with UK pension funds. If you are not worried …you should be.
But the big question facing me from my new fund managers is…”What currency do you want us to transfer into?” e.g. Euro, US Dollars or GBP? Oh boy…with all the problems of the Euro at present, who really know which is the best currency to do anything with?
So I just took a gamble and said “Keep it in GBP (Sterling)”
On my desk as I write are two banknotes – £20 sterling and 20 euros. On the former is a picture of the Bank of England, the signature of Andrew Bailey, its Chief Cashier, and the head of the Queen. The euro note also carries a signature. It is illegible but, since it comes under the letters "ECB" (European Central Bank), perhaps it is that of Jean-Claude Trichet, the bank's President.
There is no picture of a financial location, and nobody's head. Instead, one side of the euro note depicts a couple of gothic windows, and the other, beside the map of Europe, a fine old bridge. It is no accident that the note carries no head. It is because the single European currency came into being without a single European economic government and without political union. It therefore has no ultimate authority. When the euro was launched at the end of the last century, both its friends and its foes predicted that this lack of authority could not last. At some point more power would have to be put behind it, or it would collapse.
We have now got close to that point. Euro notes carry the word "euro" in Roman lettering, of course, but also, in deference to one EU member, print it in Greek characters. It is Greece's sovereign debt crisis which began the current agonies. Will those Greek letters have to come off the notes? The same crisis threatens Portugal and now – much more serious – Spain. If it reaches Italy, the country with the third biggest public debt in the world, the game would appear to be over. The fine old bridge would be blown up.
The situation is not funny for the people of Greece, Portugal, Spain, and so on, because their governments have run up dreadful public debts while sacrificing their power to devalue to become competitive. They cannot cut their exchange rate, so they must cut wages and jobs. Unemployment in Spain is already 20 per cent – and 40 per cent among young people.
It is not funny for Germany, either. German banks are overcommitted in the southern countries now afflicted. The German people are fed up with paying for the profligacy of their poorer neighbours and furious at the suggestion that the only solution is that they should pay even more.
It is not even all that funny for the UK. All sorts of devices will be used to make us pay for the clean-up of the eurozone's financial version of the BP oil-spill, even though we aren't in the eurozone. (That trick about the "natural disasters" clause can be invoked by majority voting rather than the unanimity rule that applies to all budget questions, so we can be outvoted: an 8 billion euro liability is laid on us.) Besides, it is not in our interest if our main export markets are in slump, and our neighbours and allies in turmoil.
But there is no alternative vision in the eurozone. The leaders remain determined to have no Plan B. So what we are about to get is the missing bit of Plan A. They will try to create a sort of European Treasury with centralised economic and fiscal policy – the imposition, in short, of undemocratic European economic government.
Again and again in politics, great schemes don't work – Soviet Communism, for example, and now the euro. Rational people tend to conclude that, because a scheme doesn't work, it will quickly stop. Unfortunately, rational people are wrong. Bad political schemes are usually given up only when they have been tested literally to destruction. It would be much better for Europe if the euro had never happened, and I long for it somehow to fade away, but the process of destruction will be horrendous, and it is only just beginning.
The transfer process has been going on for nearly 8 months now. One fund even decided to transfer the money by CHEQUE to New Zealand as they claim they did not have electronic transfer facilities…yeh sure…welcome to the 21st Century. Moreover, they also claimed the name of the fund I wanted to transfer the money to was TOO BIG to fit onto the cheque. For crying out loud…do they think we are all stupid? But they eventually sent a CHEQUE (Can you believe this) to New Zealand, who only had to send it back to the UK for clearance via a UK bank and the whole process is due to take 30 days for the cheque to clear.
It’s still amazing how UK pension fund managers will do anything to delay funds being transferred. It worries me that there is a big problem still with UK pension funds. If you are not worried …you should be.
But the big question facing me from my new fund managers is…”What currency do you want us to transfer into?” e.g. Euro, US Dollars or GBP? Oh boy…with all the problems of the Euro at present, who really know which is the best currency to do anything with?
So I just took a gamble and said “Keep it in GBP (Sterling)”
On my desk as I write are two banknotes – £20 sterling and 20 euros. On the former is a picture of the Bank of England, the signature of Andrew Bailey, its Chief Cashier, and the head of the Queen. The euro note also carries a signature. It is illegible but, since it comes under the letters "ECB" (European Central Bank), perhaps it is that of Jean-Claude Trichet, the bank's President.
There is no picture of a financial location, and nobody's head. Instead, one side of the euro note depicts a couple of gothic windows, and the other, beside the map of Europe, a fine old bridge. It is no accident that the note carries no head. It is because the single European currency came into being without a single European economic government and without political union. It therefore has no ultimate authority. When the euro was launched at the end of the last century, both its friends and its foes predicted that this lack of authority could not last. At some point more power would have to be put behind it, or it would collapse.
We have now got close to that point. Euro notes carry the word "euro" in Roman lettering, of course, but also, in deference to one EU member, print it in Greek characters. It is Greece's sovereign debt crisis which began the current agonies. Will those Greek letters have to come off the notes? The same crisis threatens Portugal and now – much more serious – Spain. If it reaches Italy, the country with the third biggest public debt in the world, the game would appear to be over. The fine old bridge would be blown up.
The situation is not funny for the people of Greece, Portugal, Spain, and so on, because their governments have run up dreadful public debts while sacrificing their power to devalue to become competitive. They cannot cut their exchange rate, so they must cut wages and jobs. Unemployment in Spain is already 20 per cent – and 40 per cent among young people.
It is not funny for Germany, either. German banks are overcommitted in the southern countries now afflicted. The German people are fed up with paying for the profligacy of their poorer neighbours and furious at the suggestion that the only solution is that they should pay even more.
It is not even all that funny for the UK. All sorts of devices will be used to make us pay for the clean-up of the eurozone's financial version of the BP oil-spill, even though we aren't in the eurozone. (That trick about the "natural disasters" clause can be invoked by majority voting rather than the unanimity rule that applies to all budget questions, so we can be outvoted: an 8 billion euro liability is laid on us.) Besides, it is not in our interest if our main export markets are in slump, and our neighbours and allies in turmoil.
But there is no alternative vision in the eurozone. The leaders remain determined to have no Plan B. So what we are about to get is the missing bit of Plan A. They will try to create a sort of European Treasury with centralised economic and fiscal policy – the imposition, in short, of undemocratic European economic government.
Again and again in politics, great schemes don't work – Soviet Communism, for example, and now the euro. Rational people tend to conclude that, because a scheme doesn't work, it will quickly stop. Unfortunately, rational people are wrong. Bad political schemes are usually given up only when they have been tested literally to destruction. It would be much better for Europe if the euro had never happened, and I long for it somehow to fade away, but the process of destruction will be horrendous, and it is only just beginning.
20 June 2010
The Grass is Always Greener
The number of people leaving the United Kingdom has reached a record high of 427,000 a year, according to the latest government data, but if you thought all those people were bankers, you would be wrong.
It seems that everyone is in a great hurry to leave the UK - and not just the so-called "wealth creators". The latest group to indicate they might be off are public sector workers who are probably fed up with being told by everyone how lucky they are because of their cushy pensions.
Research from the currency broker, Foreign Currency Direct, found that one in six healthcare workers are planning to work abroad in the next five years.
The research also found that 12% of teachers were planning to do the same. Of those intending to leave, 42% of doctors and nurses and 46% of teachers cited a better life-work balance as a key factor, while 30% of doctors and nurses, and 27% of teachers feared imminent tax rises.
But despite complaints about the gold-plated pay perks picked up by public sector workers in this country, 30% of those polled told Foreign Currency Direct they could actually earn more abroad.
Bankers, on the other hand, will struggle to do better for themselves outside of London, according to a report from the financial recruitment specialist, Selby Jennings. While we were imagining that the new 50% rate of tax on earnings over £150,000 would trigger an exodus of Biblical proportions from these shores by our booted-and-suited, bankers can't find jobs paying even that much in their fave tax haven - Switzerland.
I am assuming that most bankers would rather pay half of their earnings over £150,000to the tax-man than not even earn £150,000 at all. I mean, how embarrassing.
It has got to be right that the sight of a chief executive of a local council earning £250,000 and clocking up a nice final salary pension is a bit distasteful as those of us who pay their salaries feel the pinch. Yes, I know the old argument - they can't attract the best people without the salaries, but, frankly, as with Zurich, £250,000 just won't cut it anyway with the really big earners in the City of London.
Front-line workers like nurses and teachers, on the other hand, don't earn hundreds of thousands of pounds, but as a society we invest a great deal in their skills - doctors are often still doing exams in their 30s. I'd hazard a guess that there are thousands of thrusting young graduates out there who could jump straight into the shoes of most departing bankers. But how many people are truly gifted at teaching or medicine? Not so many, I would think.
It seems that everyone is in a great hurry to leave the UK - and not just the so-called "wealth creators". The latest group to indicate they might be off are public sector workers who are probably fed up with being told by everyone how lucky they are because of their cushy pensions.
Research from the currency broker, Foreign Currency Direct, found that one in six healthcare workers are planning to work abroad in the next five years.
The research also found that 12% of teachers were planning to do the same. Of those intending to leave, 42% of doctors and nurses and 46% of teachers cited a better life-work balance as a key factor, while 30% of doctors and nurses, and 27% of teachers feared imminent tax rises.
But despite complaints about the gold-plated pay perks picked up by public sector workers in this country, 30% of those polled told Foreign Currency Direct they could actually earn more abroad.
Bankers, on the other hand, will struggle to do better for themselves outside of London, according to a report from the financial recruitment specialist, Selby Jennings. While we were imagining that the new 50% rate of tax on earnings over £150,000 would trigger an exodus of Biblical proportions from these shores by our booted-and-suited, bankers can't find jobs paying even that much in their fave tax haven - Switzerland.
I am assuming that most bankers would rather pay half of their earnings over £150,000to the tax-man than not even earn £150,000 at all. I mean, how embarrassing.
It has got to be right that the sight of a chief executive of a local council earning £250,000 and clocking up a nice final salary pension is a bit distasteful as those of us who pay their salaries feel the pinch. Yes, I know the old argument - they can't attract the best people without the salaries, but, frankly, as with Zurich, £250,000 just won't cut it anyway with the really big earners in the City of London.
Front-line workers like nurses and teachers, on the other hand, don't earn hundreds of thousands of pounds, but as a society we invest a great deal in their skills - doctors are often still doing exams in their 30s. I'd hazard a guess that there are thousands of thrusting young graduates out there who could jump straight into the shoes of most departing bankers. But how many people are truly gifted at teaching or medicine? Not so many, I would think.
19 June 2010
England v Algeria (Friday night 18 June)
Last night England v Algeria.......Never in the field of World Cup conflict has so little been offered by so few to so many (with apologies to Sir Winston Churchill)
It was embarrasing to watch and even more so to explain to Ukrainian people just why England played so bad. Interesting that one Ukrainian man pointed out that the men in green (Algeria) earned about USD500 per month, whereas the ones wearing white shirts (England) probably earned a minimum of USD 100,000 PER WEEK, but the playing standards were the same!!!!!
Exactly. Enough said on this topic and let's move on.....
It was embarrasing to watch and even more so to explain to Ukrainian people just why England played so bad. Interesting that one Ukrainian man pointed out that the men in green (Algeria) earned about USD500 per month, whereas the ones wearing white shirts (England) probably earned a minimum of USD 100,000 PER WEEK, but the playing standards were the same!!!!!
Exactly. Enough said on this topic and let's move on.....
British Embassy (Ambassadors Residence) – Queens Official Birthday
I was invited to the British Ambassadors Residence on Thursday 17 June to celebrate the Queens Official Birthday. (I bit late I thought). However it was a very sunny day and the turnout in the Ambassadors garden was impressive with at least 300 people or more.
These events are always good to catch up with friends in Kyiv and to find out what’s new in the diplomatic community. Although I did feel that many of the Ukrainians attending did not know what to do and I suspect they were waiting for a speech from the British Ambassador. The lone piper was a good idea and when he started playing from the balcony at the side of the Ambassadors house, we all thought…Ah, this is it, someone will give a speech now, but it was not to be.
So a great day and interesting to talk with so many interesting people, but I’m sure the Ambassador needs to give a speech next time, just so that many people can understand WHY they are there!!!
In the UK, the Queen's Official Birthday is now celebrated on the first, second, or third Saturday in June, although it is rarely the third. It is marked in London by the ceremony of Trooping the Colour, which is also known as the Queen's Birthday Parade. The Queen's Official Birthday does not coincide with when she was born.The Queen celebrates her actual birthday on 21 April.
The list of Birthday Honours is also announced at the time of the UK Official Birthday celebrations. In British diplomatic missions the day is treated as the National Day of the United Kingdom. Although it is not celebrated as a specific public holiday in the UK (as it is not a working day), civil servants are given a "privilege day" at this time of year, which is often merged with the Spring Bank Holiday (last Monday in May) to create a long weekend, which was partly created to celebrate the monarch's birthday.
These events are always good to catch up with friends in Kyiv and to find out what’s new in the diplomatic community. Although I did feel that many of the Ukrainians attending did not know what to do and I suspect they were waiting for a speech from the British Ambassador. The lone piper was a good idea and when he started playing from the balcony at the side of the Ambassadors house, we all thought…Ah, this is it, someone will give a speech now, but it was not to be.
So a great day and interesting to talk with so many interesting people, but I’m sure the Ambassador needs to give a speech next time, just so that many people can understand WHY they are there!!!
In the UK, the Queen's Official Birthday is now celebrated on the first, second, or third Saturday in June, although it is rarely the third. It is marked in London by the ceremony of Trooping the Colour, which is also known as the Queen's Birthday Parade. The Queen's Official Birthday does not coincide with when she was born.The Queen celebrates her actual birthday on 21 April.
The list of Birthday Honours is also announced at the time of the UK Official Birthday celebrations. In British diplomatic missions the day is treated as the National Day of the United Kingdom. Although it is not celebrated as a specific public holiday in the UK (as it is not a working day), civil servants are given a "privilege day" at this time of year, which is often merged with the Spring Bank Holiday (last Monday in May) to create a long weekend, which was partly created to celebrate the monarch's birthday.
17 June 2010
Chasing the wrong man.
Ukraine is an unusual country. It does not function like a typical western European country…and WHY should it?. It’s situated in Eastern Europe.
Why should Ukraine have to conform to the so called ‘norms’ of any western European so called democracies?
The local English language newspaper in Ukraine- Kyiv Post - appears to have declared a crusade against the Head of the State Security Service in Ukraine (SBU). The current head being Mr Valeriy Khoroshkovsky a well known successful businessman in Ukraine.
Why are they doing this?
I suspect mainly because Valeriy Khoroshkovsky is a very rich and successful businessman who has been appointed as the head of the country’s state security service.
Moreover, he is also the majority shareholder in a company that controls some of the popular TV channels in Ukraine.
Prior to his appointment as Head of the SBU, Valeriy Khoroshkovsky was also Deputy Head of the SBU, also a deputy head of the national security and defense council and he has held many other government posts in the past including Head of the State Customs Service, and Minister of Economy plus others during the past ten years.
The Kyiv Post and some other media representatives claim that being head of the SBU and also being a major shareholder in a company that controls some of the leading TV channels is unacceptable to them.
I would like to pose my first question….”why?”
I can only assume that it’s because it’s ‘strange’ to them that the head of the government security service is also a successful multimillionaire businessman.
God forbid, can you imagine the Head of the British MI5 or MI6 being a multimillionaire successful businessman.
I therefore present my second question to them….”Why is it considered wrong for the Head of a State Security Service to also be a successful business person?”
I could go on with this, but the one fact that is encouraging about all of this is that Valeriy Khoroshkovsky is probably one of the ONLY people in the Ukraine government structure who is HONEST. He is probably one of the very few who can actually be trusted to NEVER be corrupted and he would certainly never need to take a bribe from anyone.
Why would he, he is already a multimillionaire.
I find it amusing that a quote from a recent article in the Kyiv Post (see below) claims that the Head of the Paris based media watchdog – ‘Reporters without Borders’ says
“it is “an unacceptable situation” when the chief of the nation’s state spy agency doubles as the owner of the country’s largest television group.”
Well please tell me WHY?.....Is it because those media people in the so called ‘west’ find it hard to understand that Ukraine does NOT have to conform to any rules or procedures or even any cultural norms adopted by EU countries about WHO should be allowed to be the Head of the State Security Service. Who are we (so called people from the west) to be determining WHO should or should not be the Head of the State Security Service in Ukraine. What right do any of us have to determine this?
Moreover, it slightly irritates me that these ‘media people’ are more interested in pursuing someone who is actually trying to do a good job for the country. Valeriy Khoroshkovsky could easily go back to being a ‘Businessman’ in Ukraine, but he is driven by the need to serve his country as best he can.
For balance, I reproduce below a recent article as reported in the Kyiv Post:
Khoroshkovsky has his say on conflicts
17 June 20910 - Peter Byrne – Staff Writer – Kyiv Post
Security Service of Ukraine chief Valery Khoroshkovsky is at the center of a storm of accusations that he is interfering with press freedoms.
Khoroshkovsky is also criticized for his numerous conflicts of interest as a top law enforcement official who owns the country’s largest media group and who serves on the council that appoints judges.
Khoroshkovsky appeared on Savik Shuster’s weekly political talk show on Ukraina TV channel on June 11, and then gave an interview to Ukrayinska Pravda’s online newspaper. Both the show and interview were dedicated to the issue of freedom of speech and freedom of assembly.
Executives of two small stations, Channel 5 and TVi, have accused Khoroshkovsky of using his position as chief of the SBU, as the Security Service of Ukraine is known, and as a member of the High Council of Justice to pressure a court that on June 7 stripped these channels of broadcasting frequencies. The frequencies were awarded in a controversial January tender. The two channels said the move threatened their development and possibly even existence.
U.S. and European officials say they are monitoring the conflict closely, while Gilles Lordet, head of the Paris-based media watchdog Reporters Without Border, said on June 9 that it is “an unacceptable situation” when the chief of the nation’s state spy agency doubles as the owner of the country’s largest television group.
Read more: http://www.kyivpost.com/news/politics/detail/70071/#ixzz0r8fSPNSv
Why should Ukraine have to conform to the so called ‘norms’ of any western European so called democracies?
The local English language newspaper in Ukraine- Kyiv Post - appears to have declared a crusade against the Head of the State Security Service in Ukraine (SBU). The current head being Mr Valeriy Khoroshkovsky a well known successful businessman in Ukraine.
Why are they doing this?
I suspect mainly because Valeriy Khoroshkovsky is a very rich and successful businessman who has been appointed as the head of the country’s state security service.
Moreover, he is also the majority shareholder in a company that controls some of the popular TV channels in Ukraine.
Prior to his appointment as Head of the SBU, Valeriy Khoroshkovsky was also Deputy Head of the SBU, also a deputy head of the national security and defense council and he has held many other government posts in the past including Head of the State Customs Service, and Minister of Economy plus others during the past ten years.
The Kyiv Post and some other media representatives claim that being head of the SBU and also being a major shareholder in a company that controls some of the leading TV channels is unacceptable to them.
I would like to pose my first question….”why?”
I can only assume that it’s because it’s ‘strange’ to them that the head of the government security service is also a successful multimillionaire businessman.
God forbid, can you imagine the Head of the British MI5 or MI6 being a multimillionaire successful businessman.
I therefore present my second question to them….”Why is it considered wrong for the Head of a State Security Service to also be a successful business person?”
I could go on with this, but the one fact that is encouraging about all of this is that Valeriy Khoroshkovsky is probably one of the ONLY people in the Ukraine government structure who is HONEST. He is probably one of the very few who can actually be trusted to NEVER be corrupted and he would certainly never need to take a bribe from anyone.
Why would he, he is already a multimillionaire.
I find it amusing that a quote from a recent article in the Kyiv Post (see below) claims that the Head of the Paris based media watchdog – ‘Reporters without Borders’ says
“it is “an unacceptable situation” when the chief of the nation’s state spy agency doubles as the owner of the country’s largest television group.”
Well please tell me WHY?.....Is it because those media people in the so called ‘west’ find it hard to understand that Ukraine does NOT have to conform to any rules or procedures or even any cultural norms adopted by EU countries about WHO should be allowed to be the Head of the State Security Service. Who are we (so called people from the west) to be determining WHO should or should not be the Head of the State Security Service in Ukraine. What right do any of us have to determine this?
Moreover, it slightly irritates me that these ‘media people’ are more interested in pursuing someone who is actually trying to do a good job for the country. Valeriy Khoroshkovsky could easily go back to being a ‘Businessman’ in Ukraine, but he is driven by the need to serve his country as best he can.
For balance, I reproduce below a recent article as reported in the Kyiv Post:
Khoroshkovsky has his say on conflicts
17 June 20910 - Peter Byrne – Staff Writer – Kyiv Post
Security Service of Ukraine chief Valery Khoroshkovsky is at the center of a storm of accusations that he is interfering with press freedoms.
Khoroshkovsky is also criticized for his numerous conflicts of interest as a top law enforcement official who owns the country’s largest media group and who serves on the council that appoints judges.
Khoroshkovsky appeared on Savik Shuster’s weekly political talk show on Ukraina TV channel on June 11, and then gave an interview to Ukrayinska Pravda’s online newspaper. Both the show and interview were dedicated to the issue of freedom of speech and freedom of assembly.
Executives of two small stations, Channel 5 and TVi, have accused Khoroshkovsky of using his position as chief of the SBU, as the Security Service of Ukraine is known, and as a member of the High Council of Justice to pressure a court that on June 7 stripped these channels of broadcasting frequencies. The frequencies were awarded in a controversial January tender. The two channels said the move threatened their development and possibly even existence.
U.S. and European officials say they are monitoring the conflict closely, while Gilles Lordet, head of the Paris-based media watchdog Reporters Without Border, said on June 9 that it is “an unacceptable situation” when the chief of the nation’s state spy agency doubles as the owner of the country’s largest television group.
Read more: http://www.kyivpost.com/news/politics/detail/70071/#ixzz0r8fSPNSv
16 June 2010
Visa Free Travel for Ukrainians?
This is a topic we have discussed many times over the past few years.
What would happen if Ukrainians were given Visa Free travel throughout the EU?
Cynics would say "They will all come to find work in western Europe".
More thoughtful types would probably say "Good, they can enjoy taking holidays and business trips in the EU just like the rest of us".
But to be frank....its a tall order to expect the EU Schengen states to agree complete visa free travel for Ukrainians. Those of us who live in Kyiv see the queues of people each day outside Embassies and Consular Offices of EU member countries waiting to find out if their visa applications have been accepted.
Many Ukrainians feel thay are treated like second class citizens in this process and most of us agree with them. Its a degrading time consuming process that they must go through even if they only need a business trip visa for a few days.
Many British citizens living in Ukraine are married to Ukrainians. But there are no guarantees that when you wish to visit the UK with your wife/husband that the UK Border Agency/UK Visa Office in Kyiv will grant the necessary visa. Nor does it matter that you have travelled with your wife/husband to the UK and many other countries around the world, you MUST make the same lengthy visa application each and every time you want to travel. I remind people also that the UK is not part of the Shengen visa agreement. So, tall oder or not, there has to be some changes for the better we all hope.
Catherine Ashton from the EU has said that a new active phase in the dialogue on visa free travel between Kyiv and Brussels has started and is likely to see its first results by the EU-Ukraine summit scheduled for this winter.
Ashton said this on Tuesday in Luxembourg at a press conference held after the meeting of the Ukraine-EU Cooperation Council attended by Ukrainian Prime Minister Mykola Azarov.
"On June 9, at the ministerial meeting, we agreed to move to what we describe as a fully operational phase of visa dialog. It means it will be based on an Action Plan that will take us towards visa liberalization. It's a really important step," Ashton said. She expressed hope the two sides would be able to demonstrate their adherence to their commitments by the time of the Ukraine-EU summit
What would happen if Ukrainians were given Visa Free travel throughout the EU?
Cynics would say "They will all come to find work in western Europe".
More thoughtful types would probably say "Good, they can enjoy taking holidays and business trips in the EU just like the rest of us".
But to be frank....its a tall order to expect the EU Schengen states to agree complete visa free travel for Ukrainians. Those of us who live in Kyiv see the queues of people each day outside Embassies and Consular Offices of EU member countries waiting to find out if their visa applications have been accepted.
Many Ukrainians feel thay are treated like second class citizens in this process and most of us agree with them. Its a degrading time consuming process that they must go through even if they only need a business trip visa for a few days.
Many British citizens living in Ukraine are married to Ukrainians. But there are no guarantees that when you wish to visit the UK with your wife/husband that the UK Border Agency/UK Visa Office in Kyiv will grant the necessary visa. Nor does it matter that you have travelled with your wife/husband to the UK and many other countries around the world, you MUST make the same lengthy visa application each and every time you want to travel. I remind people also that the UK is not part of the Shengen visa agreement. So, tall oder or not, there has to be some changes for the better we all hope.
Catherine Ashton from the EU has said that a new active phase in the dialogue on visa free travel between Kyiv and Brussels has started and is likely to see its first results by the EU-Ukraine summit scheduled for this winter.
Ashton said this on Tuesday in Luxembourg at a press conference held after the meeting of the Ukraine-EU Cooperation Council attended by Ukrainian Prime Minister Mykola Azarov.
"On June 9, at the ministerial meeting, we agreed to move to what we describe as a fully operational phase of visa dialog. It means it will be based on an Action Plan that will take us towards visa liberalization. It's a really important step," Ashton said. She expressed hope the two sides would be able to demonstrate their adherence to their commitments by the time of the Ukraine-EU summit
Review of UK Banks
Back in the UK a review has been commissioned about the future shape of the banking sector.
Sir John Vickers, former head of the Office of Fair Trading and a consumer champion, was confirmed on Wednesday as the head of a wide-ranging banking review that could decide the future shape of some of Britain’s biggest banks. George Osborne, chancellor, said Sir John’s independent banking commission would look at a number of issues, including the future “size, scale and function” of the banking sector.
The review, which will conclude within a year, will examine the case for splitting up the retail and investment arms of the biggest banks.
Mr Osborne told the Commons, however, that Sir John’s review would have a wider remit, taking in an examination of the role of banks in allowing the “build up of risk” in the economy.
Sir John’s experience in the field of competition will also be deployed to assess the impact of any reforms on retail and wholesale customers: in other words to ensure that they maximise competition.
Mr Osborne suggested to MPs that he would await the outcome of the banking review before deciding on how to proceed with the sale of stakes in the nationalised banks.
Much attention will focus on the details of his plans to put the Bank at the heart of the new regulatory structure and what role the Financial Services Authority will play in the new system as a supervisor of individual banks.
This will be interesting. In the UK we have very few independent banks. But we have some of the biggest in the world. HSBC and Barclays are the big boys now.
In my opinion the banks that are already controlled by the government should be turned into one big "peoples bank'. I remember the days when banks had brands and images we all understood. For example the old TSB Bank was commonly referred to as the 'Flat Cap Bank' where the 'working class' saved their money. God forbid we can use those terms nowadays.
Sir John Vickers, former head of the Office of Fair Trading and a consumer champion, was confirmed on Wednesday as the head of a wide-ranging banking review that could decide the future shape of some of Britain’s biggest banks. George Osborne, chancellor, said Sir John’s independent banking commission would look at a number of issues, including the future “size, scale and function” of the banking sector.
The review, which will conclude within a year, will examine the case for splitting up the retail and investment arms of the biggest banks.
Mr Osborne told the Commons, however, that Sir John’s review would have a wider remit, taking in an examination of the role of banks in allowing the “build up of risk” in the economy.
Sir John’s experience in the field of competition will also be deployed to assess the impact of any reforms on retail and wholesale customers: in other words to ensure that they maximise competition.
Mr Osborne suggested to MPs that he would await the outcome of the banking review before deciding on how to proceed with the sale of stakes in the nationalised banks.
Much attention will focus on the details of his plans to put the Bank at the heart of the new regulatory structure and what role the Financial Services Authority will play in the new system as a supervisor of individual banks.
This will be interesting. In the UK we have very few independent banks. But we have some of the biggest in the world. HSBC and Barclays are the big boys now.
In my opinion the banks that are already controlled by the government should be turned into one big "peoples bank'. I remember the days when banks had brands and images we all understood. For example the old TSB Bank was commonly referred to as the 'Flat Cap Bank' where the 'working class' saved their money. God forbid we can use those terms nowadays.
15 June 2010
Russians Invest in Ukraine
It's no suprise that Russian money is available to buy assets in Ukraine.
Foreign investors from the west will always tread very carefully when considering Ukraine. But not Russians. They have a head start by speaking the same language, same culture and the same shared perceived desire to "Do things quickly".
A conversation I had today with a local business man even raised my eyebrows, and he asked me not to disclose any details to the market yet as the investors were Russians.
Some people will claim the usual "The Russians want to buy up Ukraine". Well this is what happens in a free market economy. But I do remember the British government getting twitchy when Gasprom expressed an interest to buy British Gas.
One example from today is the purchase of 76% in Ukraine's largest locomotive producer - Luhanskteplovoz by Russia's Transmash holding.
Russia's Transmashholding buys Ukrainian locomotive maker
Today at 15:19 | Reuters Russian train equipment producer Transmashholding (TMH) on Tuesday, June 15, bought a 76 percent stake in Ukraine's largest locomotive producer Luhanskteplovoz for $52 million, officials said after a privatisation auction.
"(TMH unit) Bryansk Machinery Plant has won (the auction)," Ihor Myronyuk, deputy head of the state property fund said.
TMH, which was up against a Ukrainian bidder, had a previous deal to buy Luhanskteplovoz for $58 million from the government of Viktor Yanukovich in 2007 cancelled by the cabinet of his successor Yulia Tymoshenko, who said the deal was illegal.
Yanukovych, who enjoys strong Russian backing, was elected president in January, beating Tymoshenko in a tight race.
TMH is the main manufacturer of rolling stock in Russia, Europe's largest railway market, with over 85,000 kilometres (52,820 miles) of track, carrying 1.3 billion passengers and 1.3 billion tonnes of freight a year. French heavy engineering group Alstom signed a deal to buy 25 percent of TMH in March.
Foreign investors from the west will always tread very carefully when considering Ukraine. But not Russians. They have a head start by speaking the same language, same culture and the same shared perceived desire to "Do things quickly".
A conversation I had today with a local business man even raised my eyebrows, and he asked me not to disclose any details to the market yet as the investors were Russians.
Some people will claim the usual "The Russians want to buy up Ukraine". Well this is what happens in a free market economy. But I do remember the British government getting twitchy when Gasprom expressed an interest to buy British Gas.
One example from today is the purchase of 76% in Ukraine's largest locomotive producer - Luhanskteplovoz by Russia's Transmash holding.
Russia's Transmashholding buys Ukrainian locomotive maker
Today at 15:19 | Reuters Russian train equipment producer Transmashholding (TMH) on Tuesday, June 15, bought a 76 percent stake in Ukraine's largest locomotive producer Luhanskteplovoz for $52 million, officials said after a privatisation auction.
"(TMH unit) Bryansk Machinery Plant has won (the auction)," Ihor Myronyuk, deputy head of the state property fund said.
TMH, which was up against a Ukrainian bidder, had a previous deal to buy Luhanskteplovoz for $58 million from the government of Viktor Yanukovich in 2007 cancelled by the cabinet of his successor Yulia Tymoshenko, who said the deal was illegal.
Yanukovych, who enjoys strong Russian backing, was elected president in January, beating Tymoshenko in a tight race.
TMH is the main manufacturer of rolling stock in Russia, Europe's largest railway market, with over 85,000 kilometres (52,820 miles) of track, carrying 1.3 billion passengers and 1.3 billion tonnes of freight a year. French heavy engineering group Alstom signed a deal to buy 25 percent of TMH in March.
11 June 2010
Hot...Its Hot.....what about the economy?
The temperature reached 33 degrees today in Kyiv. I even saw some people using umbrellas as sun shades. The problem in Ukraine is that when the weather is good, people have an immediate reaction to work. i.e. why do any?. The beaches along the river Dniper are packed already. The idea of any 'Protestant Work Ethic' is far off in Ukraine. Moreover, come the months of July and August, and maybe this month, we will see many people leaving for holidays only to return in September.
Talking of hot... here is some hot news:
A company controlled by Dmitry Firtash, the Ukrainian natural gas trader, said a Stockholm court had ruled in its favour and ordered Kyiv to return 11 billion cubic meters of gas worth billions of dollars to a company he co-owns with Russia's Gazprom. The ruling could not be immediately confirmed, but if true and enforced, could mark the return of Mr Firtash as a key Gazprom partner in the supply of gas to Ukraine and European markets. Reclaiming a major role in the region’s lucrative gas trading business could significantly boost the clout of Mr Firtash, seen as a strong backer of Ukraine’s new president Viktor Yanukovych
Never a dull moment in Ukraine.
Talking of hot... here is some hot news:
A company controlled by Dmitry Firtash, the Ukrainian natural gas trader, said a Stockholm court had ruled in its favour and ordered Kyiv to return 11 billion cubic meters of gas worth billions of dollars to a company he co-owns with Russia's Gazprom. The ruling could not be immediately confirmed, but if true and enforced, could mark the return of Mr Firtash as a key Gazprom partner in the supply of gas to Ukraine and European markets. Reclaiming a major role in the region’s lucrative gas trading business could significantly boost the clout of Mr Firtash, seen as a strong backer of Ukraine’s new president Viktor Yanukovych
Never a dull moment in Ukraine.
08 June 2010
Collapse of the Euro?
Sterling jumped to an 18 month high against the euro yestrday as fresh worries about the eurozone’s financial stability.
The pound jumped nearly 1.5 cents from €1.2042 in morning trading to €1.2177 by mid afternoon.
Against the dollar, sterling was relatively strong, rising from $1.4387 at the open of London trading to peak at $1.4555.
Maybe it's a good time to buy some property in Euro's?
The pound jumped nearly 1.5 cents from €1.2042 in morning trading to €1.2177 by mid afternoon.
Against the dollar, sterling was relatively strong, rising from $1.4387 at the open of London trading to peak at $1.4555.
Maybe it's a good time to buy some property in Euro's?
06 June 2010
The future of the Euro and the Eurozone?
Never a dull moment these days in the Eurozone. It’s so difficult advising people which currency to convert and when and for how long and which currency is the safest etc. Its looks like the Euro maybe heading for parity with the US Dollar. Let’s just hope that the GBP will maintain its value. I know there are many ‘smug’ people in the UK right now saying ‘We told you so”, about the Euro and how happy they are that we (The UK) did not enter the Eurozone. I found the article below from the EU Observer to be very interesting. Why? because it was an interview that took place in May 2004.
Milton Friedman, the Nobel-Prize winning US economist and one of the most influential economists of the 20th Century believes there is a "strong possibility" that the euro zone could collapse "in the next few years".
In an exclusive interview with the EUobserver, Professor Friedman argues, "there is a strong possibility that the euro zone could collapse in the next few years because differences are accumulating between countries ... I'm not saying it is a certainty, just that it is a strong possibility".
He suggests that the euro could be replaced with the old national currencies.
New member states, new problems
His main concern with the workings of the euro zone is that it is difficult to have an economic union between countries that have substantially different economies, cultures and languages.
He believes that these problems are set to mount with the entry of the ten new member states.
Although he concedes that "actually I think that the euro has been doing quite well so far", he says that "there are problems facing it especially when you consider that you have the ten new countries in the EU".
The new countries are legally obliged to join the single currency and four of them (Cyprus, Estonia, Lithuania and Slovenia) have indicated that they intend to join it as soon as possible.
Professor Friedman believes that "there are certainly different problems for different countries" but advises, "If they are going to join, the sooner the better".
EU's economic goals are "a nice dream"
Professor Friedman, who played a pivotal role in shaping the US economy in the latter half of the 20th century, is not optimistic about the EU's chances of fulfilling its self-imposed economic goals known as the Lisbon Agenda.
He said, "No I do not think that the EU can catch up with the US by 2010. It is a nice dream, a good hope and I wish them well, the world would benefit".
"But I think the chances of achieving it are very slim. The rest of the world is not going to stand still. India is not going to stand still, China is not going to stand still and the US is not going to stand still".
Furthermore, he believes that the EU - and even the US - will eventually be caught up by the rapidly growing economy of China.
"It is almost certain that, at the current rate of growth, China will overtake both the EU and the US. But this is quite a long time down the road".
Stop strangling your economies
But the Professor, who was awarded the Nobel Memorial Prize for economic science in 1976, has plenty of advice for the EU.
"There is no doubt what the EU should do. Abolish your rules and regulations. Abolish your [high level of] spending. The European economy is too burdened with rules and regulations".
"There is nothing wrong with the basic strength of the individual countries. But they have burdened themselves with a range of rules that strangle their economies".
Maybe we should be listing more carefully to Milton Friedman forecasts.
Back to June 2010
The President of the Czech Republic, has also been vocal this week. See below:
Václav Klaus, president of the Czech Republic, has never been too worried about upsetting his European Union partners. He risks doing so again with a piece just written for the libertarian Cato Institute’s Center for Global Liberty & Prosperity provocatively entitled “When Will the Euro Zone Collapse?”
His main conclusions are twofold.
First, the euro zone has failed: It hasn’t delivered growth and the economies of member states have not converged. According to European Central Bank, average annual economic growth in the euro-zone countries was 3.4% in the 1970s, 2.4% in the 1980s and 2.2% in the 1990s. In the decade of the euro, from 2001 to 2009, it was just 1.1%.
“As a project that promised to be of considerable economic benefit to its members,” he says, “the euro zone has failed.”
His second conclusion is that, despite his provocative title, the euro zone will probably survive. “Of greater interest to non-experts and politicians (rather than economists) is the question of the collapse of the euro zone as an institution,” he says. “To that question, my answer is no, it will not collapse. So much political capital had been invested in the existence of the euro and its role as a ‘cement’ that binds the EU on its way to supra-nationality that in the foreseeable future the euro zone will surely not be abandoned.”
However, the price will be low growth for those inside the euro zone and costs for some, like the Czech Republic, outside. “To summarize, the European monetary union is not at risk of being abolished. The price of maintaining it will, however, continue to grow.”
If anyone out there REALLY knows the future of the Euro and the Eurozone, please do not hesitate to get in contact and let me know as soon as possible.
This time last year we were sharing jokes about what is a ‘safe bank’?
But I still consider the following to be safe bets. HSBC, Barclays and The Bank of Cyprus. But now that I have gone ahead and said this, I am sure things will change.
Milton Friedman, the Nobel-Prize winning US economist and one of the most influential economists of the 20th Century believes there is a "strong possibility" that the euro zone could collapse "in the next few years".
In an exclusive interview with the EUobserver, Professor Friedman argues, "there is a strong possibility that the euro zone could collapse in the next few years because differences are accumulating between countries ... I'm not saying it is a certainty, just that it is a strong possibility".
He suggests that the euro could be replaced with the old national currencies.
New member states, new problems
His main concern with the workings of the euro zone is that it is difficult to have an economic union between countries that have substantially different economies, cultures and languages.
He believes that these problems are set to mount with the entry of the ten new member states.
Although he concedes that "actually I think that the euro has been doing quite well so far", he says that "there are problems facing it especially when you consider that you have the ten new countries in the EU".
The new countries are legally obliged to join the single currency and four of them (Cyprus, Estonia, Lithuania and Slovenia) have indicated that they intend to join it as soon as possible.
Professor Friedman believes that "there are certainly different problems for different countries" but advises, "If they are going to join, the sooner the better".
EU's economic goals are "a nice dream"
Professor Friedman, who played a pivotal role in shaping the US economy in the latter half of the 20th century, is not optimistic about the EU's chances of fulfilling its self-imposed economic goals known as the Lisbon Agenda.
He said, "No I do not think that the EU can catch up with the US by 2010. It is a nice dream, a good hope and I wish them well, the world would benefit".
"But I think the chances of achieving it are very slim. The rest of the world is not going to stand still. India is not going to stand still, China is not going to stand still and the US is not going to stand still".
Furthermore, he believes that the EU - and even the US - will eventually be caught up by the rapidly growing economy of China.
"It is almost certain that, at the current rate of growth, China will overtake both the EU and the US. But this is quite a long time down the road".
Stop strangling your economies
But the Professor, who was awarded the Nobel Memorial Prize for economic science in 1976, has plenty of advice for the EU.
"There is no doubt what the EU should do. Abolish your rules and regulations. Abolish your [high level of] spending. The European economy is too burdened with rules and regulations".
"There is nothing wrong with the basic strength of the individual countries. But they have burdened themselves with a range of rules that strangle their economies".
Maybe we should be listing more carefully to Milton Friedman forecasts.
Back to June 2010
The President of the Czech Republic, has also been vocal this week. See below:
Václav Klaus, president of the Czech Republic, has never been too worried about upsetting his European Union partners. He risks doing so again with a piece just written for the libertarian Cato Institute’s Center for Global Liberty & Prosperity provocatively entitled “When Will the Euro Zone Collapse?”
His main conclusions are twofold.
First, the euro zone has failed: It hasn’t delivered growth and the economies of member states have not converged. According to European Central Bank, average annual economic growth in the euro-zone countries was 3.4% in the 1970s, 2.4% in the 1980s and 2.2% in the 1990s. In the decade of the euro, from 2001 to 2009, it was just 1.1%.
“As a project that promised to be of considerable economic benefit to its members,” he says, “the euro zone has failed.”
His second conclusion is that, despite his provocative title, the euro zone will probably survive. “Of greater interest to non-experts and politicians (rather than economists) is the question of the collapse of the euro zone as an institution,” he says. “To that question, my answer is no, it will not collapse. So much political capital had been invested in the existence of the euro and its role as a ‘cement’ that binds the EU on its way to supra-nationality that in the foreseeable future the euro zone will surely not be abandoned.”
However, the price will be low growth for those inside the euro zone and costs for some, like the Czech Republic, outside. “To summarize, the European monetary union is not at risk of being abolished. The price of maintaining it will, however, continue to grow.”
If anyone out there REALLY knows the future of the Euro and the Eurozone, please do not hesitate to get in contact and let me know as soon as possible.
This time last year we were sharing jokes about what is a ‘safe bank’?
But I still consider the following to be safe bets. HSBC, Barclays and The Bank of Cyprus. But now that I have gone ahead and said this, I am sure things will change.
02 June 2010
Ukraine Government annouces procedures for VAT Bonds
Ukraine Government Announces Procedures for VAT Bonds
The Ukraine government has now set out the terms for converting VAT refunds due in to State Bonds. See procedures below and also comments from Astapov Law Firm
Procedure of issuing VAT bonds
The bonds will cover all VAT refunds claimed prior to 1 May 2010. The refund must have been confirmed by the tax authorities by this date and included in the inventory register maintained by the tax authorities;
• Maturity period of VAT bonds is 5 years;
• VAT bonds will be redeemed twice a year in the amount of 10% of the bonds' nominal value;
• Interest is 5,5% p.a.;
• By 25 June 2010 companies should submit to the
local tax authorities an application for acquisition of the bonds;
• The procedure is voluntary.
------------------------------------------------------------------------------------
Statement from Astapov International Law Firm, Kyiv:
During the years of struggle with the state for VAT refund enterprises have developed various legal measures to protect their rights.
Most obvious legal measure is to claim VAT refund at administrative court. In this case the tax-payer has various options in specifying its demands such as claiming VAT reimbursement and damages, collecting budget indebtedness, forcing the state treasury to transfer the funds within 7 banking days.
But in spite of high chances of success and years spent in the court proceedings, the enforcement of such decision is very complicated due to the mere lack of money at the accounts of State Treasury.
Another legal option for tax-payer to get the VAT debt is administrative. The actions involve numerous demands to tax authorities and respective officials purporting to force the state to pay the debt voluntary. Upon certain circumstances such approach may be more effective than the judicial one and many companies prefer not to argue with the state in the court.
And the latest possibility to reimburse the state debt is to convert it to VAT bonds recently offered by the government, though the economic effect of such conversion is quite doubtful.
Tatyana Kuzmenko
Partner
ASTAPOV LAWYERS
kuzmenko@astapovlawyers.com
www.astapovlawyers.com
The Ukraine government has now set out the terms for converting VAT refunds due in to State Bonds. See procedures below and also comments from Astapov Law Firm
Procedure of issuing VAT bonds
The bonds will cover all VAT refunds claimed prior to 1 May 2010. The refund must have been confirmed by the tax authorities by this date and included in the inventory register maintained by the tax authorities;
• Maturity period of VAT bonds is 5 years;
• VAT bonds will be redeemed twice a year in the amount of 10% of the bonds' nominal value;
• Interest is 5,5% p.a.;
• By 25 June 2010 companies should submit to the
local tax authorities an application for acquisition of the bonds;
• The procedure is voluntary.
------------------------------------------------------------------------------------
Statement from Astapov International Law Firm, Kyiv:
During the years of struggle with the state for VAT refund enterprises have developed various legal measures to protect their rights.
Most obvious legal measure is to claim VAT refund at administrative court. In this case the tax-payer has various options in specifying its demands such as claiming VAT reimbursement and damages, collecting budget indebtedness, forcing the state treasury to transfer the funds within 7 banking days.
But in spite of high chances of success and years spent in the court proceedings, the enforcement of such decision is very complicated due to the mere lack of money at the accounts of State Treasury.
Another legal option for tax-payer to get the VAT debt is administrative. The actions involve numerous demands to tax authorities and respective officials purporting to force the state to pay the debt voluntary. Upon certain circumstances such approach may be more effective than the judicial one and many companies prefer not to argue with the state in the court.
And the latest possibility to reimburse the state debt is to convert it to VAT bonds recently offered by the government, though the economic effect of such conversion is quite doubtful.
Tatyana Kuzmenko
Partner
ASTAPOV LAWYERS
kuzmenko@astapovlawyers.com
www.astapovlawyers.com
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