You're reading: Ambassador: Tax burden ’unequal’

Pieter Jan Wolthers, the ambassador of the Netherlands to Ukraine and Moldova, came to Ukraine for the first time in 1979 on a diplomatic mission to the Soviet Union. Wolthers said he could never imagine that, 30 years later, he would work in an independent Ukraine.

Having served across numerous countries, including Poland, Libya and Romania, he returned to Kyiv in 2009 to strengthen business, social and cultural exchanges and oversee his country’s financial grants for social initiatives.

Kyiv Post: Ukraine’s undergone a tremendous makeover since your first visit. What has changed in your job compared to the 1970s?

Pieter Jan Wolthers: There were some fundamental changes. At that time, for diplomats from Western Europe and the U.S., it was impossible to meet common citizens. People feared reprisals and the secret services. This is, fortunately enough, completely over.

Now, I have an extensive network of relations with all types of civil society organizations and individual citizens. What stayed in place is bureaucracy that feeds corruption.

A requirement to have a rubber stamp for any kind of document has been in place for the last 100 years while the world moved on and we live in the electronic era where we do away with paperwork.

KP: How deep is cooperation between the Dutch and Ukrainians?

PW: There have been constant exchanges between Ukrainian officials and organizations and their Dutch counterparts. We run a social program, MATRA, which supports different initiatives, and it allows me to learn more about Ukraine: One day I hear from people who work with children with disabilities, and the other day about possibilities to save energy.

We also work with a union of mayors that are interested in energy-saving programs and want to make necessary adaptations in their cities … Then, we showed Dutch films at the Molodist Film Festival. In January, there was a concert in philharmonic where Dutch and Ukrainian musicians played together.

KP: What are the Dutch business interests in Ukraine?

PW: Our business community of hardly more than 200 people is active and sees enormous economic potential in this country. The two key factors that attract the most are a highly educated population and very fertile soil.

Once a Dutch minister of agriculture visited Ukraine and said that one should be careful sticking his finger in the ground because, before he knows it, the finger will have roots.

So Dutch businessmen are very much involved in Ukraine’s agriculture, doing everything from growing potatoes to building greenhouses.

The importance could be well illustrated by the fact that the embassy has a separate agricultural councilor and two staff members that work for him.

There is, of course, interest in other areas and I’m proud that none of the businesses pulled out during the financial crisis. On the contrary, we see businesses coming for the Euro 2012 football championship.

KP: Is it true that many non-Dutch companies send their investments abroad through the Netherlands to take advantage of low taxation?

PW: That is certainly a part of the story. We do have a tax system that is attractive for companies to set up their headquarters in the Netherlands.

The Dutch tax office, however, requires a great degree of transparency, and the companies use this fact to improve their image as a transparent and reliable player.

Even some Ukrainian companies come to our country to set up their headquarters for those reasons.

KP: Does it show that the Ukrainian tax system is flawed?

PW: Unfortunately, not everybody pays taxes in Ukraine, which makes the tax burden unequal. Tax evasion is something that we don’t tolerate psychologically in our country … there is a strong feeling for the common good.

There are other countries where the approach was traditionally different, for example, where foreign powers occupied the territory and it became almost legitimate for citizens not to pay taxes to the occupying force.
I would like to see a Ukraine where people could pay moderate taxes so that everybody could contribute.

KP: So do you feel that Ukraine is moving forward?

PW: President Viktor Yanukovych and Prime Minister Mykola Azarov were successful in formulating the reforms and starting to implement them.

There is pressure to make progress in negotiations towards an association agreement with the European Union, including a comprehensive free trade agreement.

We see things moving, we see commitments being made and followed up. It’s not always easy. The tax code is one example. It’s not ideal, but it’s a step forward. Now the government should be addressing customs, pension and housing reforms.

Kyiv Post staff writer Katya Grushenko can be reached at [email protected]