Opening statement by Prime Minister of Ukraine Arsenii Yatseniuk during the Government's session on March 19, 2014

Honorable Members of the Cabinet of Ministers!

First of all I’d like that the Government will pay tribute to the killed Ukrainian soldier in Crimea yesterday.

Please, sit down. 

Dear colleagues! We have heavy agenda for today. It is very important for us to finally stabilize the situation in Ukraine, in particular to impose order so that the Ukrainian laws is carried out and to allow the judicial system to fulfill their basic function – civil protection. And then I fully support the position of Minister of the Interior on hard and adequate approach in staffing issue. We have no friends or outsiders. We have only the interests of the Ukrainian people.

We’ve had a discussion of personnel appointments. Starting from today's Cabinet session all personnel appointments, including on deputy heads and heads of state enterprises, will be taken here, in this chamber, in the presence of all members of the Government. This will be another step towards transparency of the Cabinet’s activity.

That’s why the first issue of agenda is a crime rate in Ukraine and its stabilization. I’d like to ask the Interior Minister and SSU Head to inform on this issue. Mr. Nalyvaichenko, thank you for participation in the Cabinet session.   

The Ministry of Finances has prepared a number of legislative initiatives on amendments to tax system. We realize that not all of these legislative initiatives will be perceived by society positively, but we all have to realize that the situation is such that we must stabilize the economy, get serious economic and financial assistance from the International Monetary Fund and our partners. And this stabilization of the economy will allow us to go out on economic growth. 

I hope that the stabilization period will last for this year, and economic growth, which will be based on economic performance of 2014, will take place next year. So it is crucial for us now - do not fall. We do our best to keep the economic situation.

Here are some tax initiatives. I’d like to consult with you, Mr. Shlapak, on one of the tax initiatives - a tax initiative on taxation of interest rates and dividends. It comes about the taxation of incomes received from investment of funds on deposits.

I will express you my position, and we consult with members of the government. I’m opponent to the idea to tax income from all deposits. So, I think that we should have a bill that taxes incomes of only of the riches. What does it comes about?

So I’ve look through, in particular my own income declaration and my interest rate incomes received from investment of funds on deposit was amounted to UAH 614 thousand for last year from those incomes that I had. I did not pay any tax rate to the state budget. So, I think it's wrong. That is, those who receive significant revenue should share with the country. That is why we need to tax, including my income, and the citizens of Ukraine who receive significant income from deposits.

As for the Ukrainians, who have little savings, then I'm against taxation of such incomes on such deposits. As far as I know, 90% of the Ukrainians have deposits that are up to UAH 50 thousand. Incomes on such deposits should not be taxed.

And 10% of the riches have to share with the country and society - this is the right approach, it happens everywhere. And on the one hand, we will solve the problem so that persons invest money for deposit, on the other hand - this is a matter of social justice and help to the country. If you get hundred thousands of income – you should give a part to the society.

So, I ask that we make the decision, and I will turn to the Parliament, where there are also the 10% of the Ukrainians, who receive significant revenue from investment funds on deposit. It's time to justice and it's time to help our country. The taxes will pay those who have what to pay.

I also address to the Government members, we should hold Government session on Saturday; the Finance Ministry is preparing a package of laws relating to the introduction of stringent fiscal measures. And we should next week to vote them in order to speed up the process of obtaining funds from the International Monetary Fund.

And I spoke to the Minister of Economy and Trade, I’d like to address along with all members of the government - on the one hand, we introduce a package of laws that have no applause from the Ukrainian people, because if you need to tighten the belt, it is clear that this is a natural reaction. But I respect the position of the Ukrainians, who are ready at this difficult time to help the country.

Now on the other hand, I ask the Government immediately, and the Ministry of Economy and Trade first of all, to introduce the so-called "positive package." These are issue of deregulation, attracting investment, creating jobs. Oleksandr Vitaliyovych, we should be engage in the preparation of the Code of economic growth – it is a reduction of taxes and, therefore, broadening the tax base.

Volodymyr Borysovych, I have to ask to you, concerning the deregulation. The whole gang, which has been sitting on issuance of permits, various documents for the construction, the monopoly that was here in the Cabinet should be broken immediately. We return power to the fields – it is the only way to overcome the central corruption. And we write this new rule. So, I ask, we should work quickly and efficiently, the country is expecting immediate changes. We have very little time so that the Ukrainians gave first estimates of how this Government operates. And it depends on us what the estimates will be.

Thank you