Independent TV station sued for tax evasion (09/19/99)

Independent TV station sued for tax evasion

KYIV - The State Tax Administration has sued the independent television station STB for evading taxes, overestimating its expenses and concealing incomes, the Associated Press and the Eastern Economic Daily reported.

RFE/RL Newsline reported that, according to the tax administration, STB paid 19,000 hrv ($4,200 U.S.) in taxes on advertising income in June, instead of some 1 million hrv. According to tax authorities commercials brought in a total of 3.23 million hrv including taxes. STB denies these accusations, saying tax inspectors have incorrectly calculated its income. It claims that both the tax inspections and the freezing of its bank account are intended to put pressure on the station before the presidential elections.

Eastern Economist had previously reported that the bank account of STB, considered the country's most independent newscaster, was frozen on August 26 with all transactions suspended by order of Kyiv's Radianskyi District Tax Police for "failing to deliver documents related to calculating and paying taxes."

STB has an audience of about 30 million, employs 3,000 nationwide, and is now compiling and purchasing new programs and video materials for the approaching TV season. STB is the only station broadcasting Verkhovna Rada sessions on a daily basis on its program Vikna-Parliament (Window to Parliament) and after the central state channel, UT-1, stopped airing the legislature's activities the ensuing fall-out revealed the full extent of non-cooperation between the country's legislature and executive branch.

"Considering the trend in Ukraine in recent years to shut down independent media," Tim O'Conor, director of IREX ProMedia, a press-supporting organization, told Eastern Economist, "I would have to be suspicious about the grounds upon which the actions were taken." The station's Administration Board chair, Volodymyr Syvkovych, connected the tax police actions to the station's earlier statement that it "will not support any presidential candidate during the campaign," and a subsequent statement that "STB will not change its position on the matter."

STB President Dmytro Prykordonnyi suspected that another reason is the station's "objective coverage of the campaign activity of every presidential candidate."

In addition, STB is a popular station in the regions. According to director of the European Institute for Free Media, Alivtina Boretska, "regional TV stations, supporting various presidential candidates, would receive a big chunk of extra air time if STB were closed."

The 1 million hrv fee imposed by the inspectors must be paid within two weeks, or STB will be cut off the air. With the fall TV season just around the corner, STB had planned to double its newscasts.

Eastern Economist reported that STB was preparing for talks with the Radianskyi District Tax Police. If talks fail, STB will take the tax collectors to court, and possibly to international courts. Station management plans to turn to IREX ProMedia for legal consultation. "We will use all of our powers and knock on every door to bring our station's operations back to normal," concluded Mr. Syvkovych.

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