Firtash estimates black economy in Ukraine at 40% of GDP

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Nov. 29, 2011, 9:50 p.m. | Business — by Interfax-Ukraine
The size of Ukraine's black economy comes to at least 40% of the country's GDP, the well known Ukrainian businessman Dmitry Firtash said at the congress of the Ukrainian Federation of Employers on Tuesday. "There is one reason [for this]. Because we all have problems with the tax system…we have problems with customs, with fire-fighting stations, with local authorities," he said.

Firtash requested that Ukrainian Prime Minister Mykola Azarov, who was at the congress, resolve the problem of VAT compensation on product exports.

"We aren't saying that it is necessary to pay everything and this has to be done in a day. But the issue should be settled," Firtash said.

Firtash is the owner of major chemical enterprises in Ukraine, Estonia, and Tajikistan. He also invests in the financial sector and real estate.

In addition, Firtash owns a 50% stake in the gas trader RosUkrEnergo.

The businessman's main assets are concentrated in the chemical sector.

For instance, he owns OJSC Azot (Cherkassy), PJSC Severodonetsk Azot, PJSC Stirol (Donetsk Region), and OJSC Rivneazot in Ukraine.

Firtash also owns Crimean Titan (and its subsidiary Irshansk ore mining and enrichment plant) and Vilnohirsk mining and metallurgical works), as well as Crimea-based Crimea Soda Plant and Kyiv-based Nadra Bank.

He is also the owner of Nitrofert (Estonia) and Tajikazot (Tajikistan) outside of Ukraine.

Firtash was elected chairman of the Ukrainian Federation of Employers on Tuesday.
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Anonymous Nov. 29, 2011, 10:22 p.m.    

That is a bit low. Most people estimate the block economy to be at 70% or more.

One way to limit the black economy is to require any purchase above $1000.00 to be paid via a bank transfer of funds in order to have the sale notarized without this then ownership or possession can not be established and the person/company runs the risk of being subject to higher taxation.

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Anonymous Nov. 30, 2011, 6:36 a.m.    

Ha ha hah. Have you ever even been to Ukraine, Mr. know-it-all? Cars would then be transferred as gifts, as would real estate, people would stop buying refrigerators and LED TVs from Foxtrot and buy it from a black market business (probably run by Customs), building supplies would be bought in 999USD increments, and multiple-company schemes would pop up to divide the price of holidays to Turkey so they would come in under your magic number.

There's not much professionalism here, but they are world-class masters of dodging the system.

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Anonymous Nov. 30, 2011, 4:13 p.m.    

Then they would not have ownership of the vehicle the value of the purchase even as a gift would need to be declared. It is the same as in the west, And yes I have been to Ukraine many of times. Over 7 years in total

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Anonymous Nov. 30, 2011, 7:50 p.m.    

Then you should know that the law in Ukraine is honored only in the breach - especially by putzes like Firtash.

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Anonymous Nov. 30, 2011, 3:16 a.m.    

He should know..... no doubt he is an expert in dealing in the black economy.

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Anonymous Nov. 30, 2011, 4:13 a.m.    

It is better for the economy to be 100% black, so the corrupt government can't collect any taxes from the people.

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Anonymous Nov. 30, 2011, 5:18 a.m.    

Yanukovych and his Party of Regions thugs raid and forcibly confiscate legitimate business.

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Anonymous Nov. 30, 2011, 3:43 p.m.    

Firtash makes good points.I would like to hear his thoughts on steps to improve economy.

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Anonymous Nov. 30, 2011, 7:39 p.m.    

90% of Firtash's money was made illegally and on which he paid no tax...but squirreled it away in some off-shore account.

Firtash should arrested immediately.

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