Luhansk and Donetsk regions provide tax revenues to the budget

Despite the difficult situation, Luhansk and Donetsk regions provide tax revenues to the budget, First Deputy Minister of Revenue and Duties of Ukraine Ihor Bilous said at a briefing at the Cabinet of Ministers of Ukraine.

"Sloviansk is the only city where tax office and service center of taxpayers are closed. In all other cities tax bodies are working in normal mode. Most taxpayers provide reports and make payments via Internet, therefore no problems have been encountered. We are keeping the situation under control," underlined Ihor Bilous.

According to the Head of the Ministry of Revenue and Duties, despite some isolated cases, when workers were evacuated in response to a credible threat, inspectios and service centers of payers are operating and providing services to taxpayers.

Overall, in May 2014, the State Budget received UAH 17.749 billion of tax revenues. It is by 2 per cent less than in May 2013. Political instability before the election as well as the whole economic downturn together with active military actions in the eastern regions affected revenues.

"Across Ukraine we do not get about UAH 710 million. The main reason is the decline in business activity", noted Ihor Bilous.

Most of the State budget revenues have been lost due to economic difficulties in Eastern Ukraine, where a large number of industrial enterprises have been forced to slow down or stop output and sales. Many of these companies have traditionally focused on the Russian market and are going through difficult times. Also, many companies have been affected by fall in the exchange rate of hryvnia.

The Ministry has received UAH 422 million taxes less in Eastern Ukraine, 220 in Donetsk region and 202 in Luhansk respectively.

In contrast, by eliminating tax pits in May the budget attracted UAH 2.6 billion. Since March of this year, the Ministry provides monthly over UAH 1 billion of additional VAT.

According to Ihor Bilous, a positive trend gives grounds to expect that in 2014 the Ministry of Revenue and Duties (or, in the nearest future, the State Fiscal Service) will fully perform the task of the Ministry of Finance as to the State Budget.