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You're reading: Aggressive tax collection, global slowdown erode state revenues
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According to calculations
by Kyiv-based investment bank ICU, state budget revenues fell 20.2
percent in July compared to June, and 20 percent compared to last
year. At Hr 23.5 billion ($2.9 billion) July’s income was the second
lowest this year, behind a traditionally lean January. It was also
the first time monthly revenues dropped compared to last year, when
authorities began to step up revenue collection.

The lower revenues can
partially be attributed to a weaker external environment and seasonal
corporate tax payments, which typically peak in May, August and
November, said Alexander Valchyshen, head of research at investment
bank ICU. But excessive tax collection, which has depleted businesses
resources also played a role, he added.

The situation has two
sides, confirmed Oleksandr Zholud, senior economist at Kyiv-based
think tank International Center for Policy Studies. Tax collectors
have indeed been overzealous, he said, but a general slowdown of the
economy is also making itself felt. The original government forecasts
for 2012 saw consumer prices rise 7.9 percent, Zholud explained, but
now we even have deflation, so the collection of nominal taxes is
much lower.

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