Victor Yushchenko has met Kharkiv’s business leaders to address the issue of VAT rebates, the press office reports.

“The discussion about the culture of VAT rebates, which we have recently started at the Presidential Secretariat, will be continued, perhaps even resulting in penalties for those who are not capable of professionally implementing this policy,” he said, expressing confidence the government would support his stance.

The President agreed that value added tax must not be regarded as manufacturer tax.

“The dull technology of the administration of value added tax makes it manufacturer tax,” he said, characterizing such schemes as “informal loans taken by the state, depriving business of circulating assets.”

“The bigger our VAT problems, the colder and more stagnant our economy becomes. I will not let the Tax Administration put its hands into the pockets of business on behalf of the government. It is wrong and contradicts national interests,” he said.

Mr. Yushchenko said Ukraine’s governors had recently decided to set up special groups on VAT rebates in the regions. He urged Kharkiv’s authorities to cooperate with law enforcement agencies, journalists and businesspeople in this area.

The President also suggested that the business community submit their proposals on how to build transparent relations between government and business to his secretariat so that he can later re-send them to the Verkhovna Rada and the government.

“We are aware of the role the Kharkiv region and its industries play in the nationwide dynamics of the economy and understand we cannot neglect it,” he said.

He thus suggested that the group involves heads of the region’s leading companies, local officials and self-government representatives. He said they should work out a number of plans which could be later considered at a meeting of the National Security and Defense Council.

The President and the business leaders spoke about regulatory policies, tax and budget issues, free economic zones, municipal reforms and customs procedures. Mr. Yushchenko said he would not sign next year’s budget if it did not improve fiscal laws. He also insisted that some taxes be changed.

Then Secretariat Chief of Staff Viktor Baloha read out a presidential decree to decorate Academician Volodymyr Stashys with the Hero Star of Ukraine.

Following the meeting, the Head of State met local students that are participating in a social program to support orphans.


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