BUSINESS IN BRIEF (02/27/00)

BUSINESS IN BRIEF

Tax administration to collect more revenues

KYIV - The State Tax Administration must collect 28 billion hrv in "real money" for the state budget in 2000, which is 40 percent more than in 1999, stated the administration's head, Mykola Azarov, on February 8. He added that the tax administration will have to collect 700 million hrv more each month than in 1999. At the same time, the tax pressure on businessmen should be lowered, said Mr. Azarov. In January tax services transferred 2 billion hrv to the consolidated budget and 1 billion hrv into the state budget, with almost 100 percent of the income in monetary form. Mr. Azarov stated that the highly developed shadow economy and the extraordinary pressure on businessmen prevent the administration from collecting the maximum revenue. In 1999 tax collectors generated 26.5 billion hrv into the consolidated budget, which was 3.4 billion hrv more than in 1998. In 2000 the excise and profit taxes will be collected for the state budget, which will prevent local tax administrations from making mutual settlements, stated Mr. Azarov. The administration will not postpone tax payments and provide tax breaks to companies, he said. Mr. Azarov added that a moratorium on changes to tax legislation should be introduced until the new tax code is approved. This is necessary to simplify the registration of VAT payers, increasing the minimum trade volume from 20,000 to 61,000 hrv. Mr. Azarov proposed that the government cancel all fees for delayed tax payments in 2000, if an enterprise pays off its tax debt in full, restructure the tax debt as of January 1, 1999, and reconsider the fee rate and introduce a single rate for untimely payments of taxes and fees. Prime Minister Viktor Yuschenko called on the STA to stop inspecting companies, which pay taxes on time and to restructure their tax debts for previous years. A clear model for fiscal control of oil and gas structures should be created, since they mostly have a chaotic system of payments, said Mr. Yuschenko. (Eastern Economist)

Bolshevik will produce escalators

KYIV - Kyiv Mayor Oleksander Omelchenko issued an order, according to which the Kyiv Bolshevik plant will produce escalators for Ukraine's subways. It is expected that the serial production will start in 2002. Subway escalators, which make up 50 percent of the cost of construction of a subway station, hitherto have not been produced in Ukraine. (Eastern Economist)

Kyiv metro plans expansion to suburbs

KYIV - KyivMetroBud, the city's subway construction company, in 2000 plans to extend the Sviatoshyn-Brovary line by two stations to Novo Billichi, with the extended service of the local electric train infrastructure. In 2001, the company plans to extend the Obolon line by one station, with further construction of the subway to the Troieschyna district of the city.(Eastern Economist)

Commodity exchange opens in Zhytomyr

ZHYTOMYR - The first agricultural commodity exchange was created in the Zhytomyr Oblast. The exchange was created for the purpose of selling all types of agricultural commodities. Among the 24 founders of the exchange are agricultural joint stock companies, and private and collective agricultural enterprises. (Eastern Economist)

Cyprus and Ukraine sign agreements

KYIV - Three inter-governmental documents were signed during the visit of Cypriot Foreign Minister Ioannis Kasoulidis to Kyiv. These included agreement on air routes, and trade and cooperation between the foreign ministries of both countries. Other documents planned for signing include an agreement on eliminating double taxation, on international and sea transportation, and an agreement on tourism. The trade volume between the countries in 1999 was $102.7 million (U.S.), down from $120 million (U.S.) in 1998. Cyprus is the fourth largest investor in Ukraine, following the United States, the Netherlands and Germany. (Eastern Economist)

Reemstma prepares new product launch

KYIV - The Kyiv tobacco plant Reemstma plans to launch a new product on the market in the first half of 2000, said the head of the tobacco department, Pavlo Soloviev. The type of product has not been disclosed, but "in recent years, the company has been aiming to produce low-nicotine cigarettes," said Mr. Soloviev. Reemstma refines 80 percent of domestically produced tobacco. (Eastern Economist)

AN-140 aircraft undergoing certification

KYIV - The certification works for the AN-140 under low-temperature conditions are 90 percent complete. The certificate is expected to be received in April-May of this year. The AN-140 is capable of carrying 52 passengers, with maximum speed of 575 kilometers per hour and carry up to 6 tons of cargo. The AN-140 was designed to replace the outdated AN-24 model. (Eastern Economist)

Final TU-160 planes delivered to Russia

KYIV - The remaining two TU-160 strategic bombers flew off to Russia on February 21. The planes were the last of the group of 11 bombers that Russia received for compensation for Ukraine's gas debts. The price of the bombers was agreed upon at $285 million (U.S.). Russia also received service stations and over 600 air-to-air missiles for TU-95MC and TU-160 bombers. (Eastern Economist)

Automaker sets 2000 production goals

KYIV - The VAT ChernihivAvtoDetal automobile plant, ex-subsidiary of Gorkov Avtomobile Plant or GAZ in Russia, plans to produce around 4,500 cars in 2000. In 1999 the plant produced 2,000 cars. The cargo trucks GAZ-3307 and Gazel models have been assembled at the plant since 1998, and Volgas since 1999. In 2000 the plant started producing Sobol models, which may be produced as both cargo and passenger vehicles. The general manager of the plant, Ihor Latynskyi, said the plant was able to agree for supply of parts from GAZ sufficient for the assembly of 4,000 vehicles. The plant is also starting the production of its own spare parts for the vehicles. (Eastern Economist)

Tax breaks for wine, cognac producers

KYIV - The Cabinet of Ministers has reinstated tax breaks on imported raw materials for the production of champagne wines, cognac and grape wines. Taking into account the lack of raw materials for production of wines on the domestic market, such breaks would enable producers to receive 3.7 million liters of raw material in 1999-2000, produce 15 million bottles of champagne and sparkling wine, 1.7 million deciliters of grape wines and 500,000 decaliters of cognac. Additional income to the state budget is forecast at 91 million hrv. (Eastern Economist)

Rada sets new import duties on cigarettes

KYIV - The Verkhovna Rada on November 19, 1999, introduced new import duty rates on cigarettes that will remain in effect until July 1, 2000. The new import duty rate on filter cigarettes is 10 hrv per 1,000 units and 7 hrv per 1,000 units of non-filter cigarettes. According to Ukrainian legislators, the new law will help combat cigarette smuggling and stimulate growth in domestic cigarette production. (Eastern Economist)

SPF will sell stakes in energy companies

KYIV - Starting in the fourth quarter of 1999 through the first quarter of 2001, the State Property Fund will announce quarterly three to five tenders for the sale of stakes in energy companies. The SPF will attempt to sell stakes in three regional power-generating companies by the end of 1999. The companies show the lowest figures in the industry in terms of volumes of payment for energy supplied to the market. (Eastern Economist)

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