Oleksandr Klymenko Official website
Digest | 1485 | 17.06.2014

Ukraine is losing more than gains from loans due to declining investments, – Oleksandr Klymenko

On the background of attracting loans amounting $5.79 billion (since March 2014), volume of foreign direct investment decreased by $6 billion during the first quarter of this year. Such a large-scale reduction of the investment in Ukraine’s economy was recorded in 2005 (for the first time) It has been declining for eight years. Oleksandr Klymenko – ex-minister of Revenue and Duties of Ukraine – wrote about it on his Facebook page.

“I agree with those, who believe that the current situation Ukraine can not be resolved without international loans. However, at the same time, loans – are the borrowed resources, which should be repaid with rather high interests. The main driver of the economy – it is not just loans, but investments. It is technology, new workplaces, paid taxes to the budget, proceeds to the Pension Fund, etc. The government should not forget about the work on attracting investors “- says Klymenko.

According to him, in March 2014 Ukraine has attracted loans amounted $5.79 billion from the IMF, World Bank, EBRD, EIB and other institutions. The government is planning to get about loans amounted $31.5 billion more. At the same time, according to the State Statistics Committee, at the beginning of 2014 there were $58.2 billion of foreign direct investment. During the first quarter of this year, the country has lost the same $6 billion, which could be invested in economic development. “Such a large-scale reduction of the investment in Ukraine’s economy was recorded in 2005 (for the first time) It has been declining for eight years!” – said the ex-minister.

At the same time, Klymenko wonders, why do officials forget about foreign investors during the cajoling the foreign creditors? Why do they create such conditions, under which there is only one way out for the investors – «to get out»?

According to Klymenko, during the five months of 2014, enterprises with foreign assets have «incremented» remnants of unrecovered VAT on UAH 2.6 billion. It is 1.5 times more residues in the same period last year. Overpayments from “foreigners” have increased by UAH 3.5 billion. On March 1, 2014, the amount of overpayments was UAH 3.9 billion, while nowadays there is UAH 7.4 billion despite the fact that enterprises with foreign investments have provided a third of the state treasury paid taxes and fees during five months this year.

Ex-minister insists that the State Fiscal Service has to establish a dialogue with foreign investors and to intensify efforts on improving the tax climate.

He also noted that foreign investors are very sensitive on issues of tax climate. Each structural business has a long planning horizon. They need to “clearly understand what steps the government is planning to take in the tax area, see the strategy of reducing the rates, simplify the documents and get guarantee of stabile VAT refunding, terms of overpayment’s returning”.

We were holding regular meetings, talking with investors and explaining all these questions, solving all the business concerns. Is it holding today? If it is, the data of State Statistics Committee – is Key Performance Indicators of its effectiveness. The power relies on the loyalty of the patriots in its actions with the national business…What does it expect from a “work” with foreign business? How could you talk about getting into the top 20 Doing Business in such situation? “- concluded Oleksandr Klymenko.

Link to source: Economy Observer

Photo: fiscaleweb.com