You're reading: Update: Tax protests gain strength in Ukraine

Thousands of angry Ukrainians on Monday pumped their fists in the air and chanted "Shame, Shame!" on Kiev's central square protesting legislation that would increase taxes for small and medium size enterprises.

The protest was part of a series of demonstrations that are the largest outpouring of public anger in years, and pose a threat to the popularity of President Viktor Yanukovych.

Lawmakers last week passed a bill that raises taxes for smaller companies while lowering the tax burden on larger enterprises, sparking angry rallies across the country. In several cities, infuriated activists blocked key streets and roads in protest.

Yanukovych, whose party supported the bill, is hesitant to sign it into law. He said Friday that he would take time to analyze the bill.

His chief of staff Serghiy Lyovochkin on Monday exhorted the protesters to be patient and said Yanukovych would take their arguments into consideration.

The government says the reform is a long-overdue measure that will streamline tax legislation, increase budget revenues and help fund pensions and other social programs after the economy contracted 15 percent last year. Entrepreneurs say it will cripple small and medium-size business by depriving them of much-needed tax brakes.

"We want to defend our right to work, to pay taxes but in a reasonable way," said protester Olga Zabolonkova.

Experts agree that Ukraine must reform is tax system, which currently ranks among the three worst in the world, according to a study of 183 nations conducted by the World Bank group.

But critics say that the new tax code will actually decrease government revenues by pushing many businesses into the shadow and will fuel corruption among tax police by giving tax inspectors too much power while inspecting firms.

Oleksandr Lozovy, an analyst with Phoenix Capital investment company, said more work on the tax reform is needed.

"It wasn’t developed thoroughly enough, it doesn’t take into account the needs of small and medium-sized businesses."

Deputy Prime Minister Serhiy Tigipko defended the painful measure as the only way to reform the Ukrainian economy and said popular protests should be ignored.

"The people are not always right," Tigipko said Friday. "A public discussion of the tax code is … nonsense."