You're reading: Parliament postpones VAT law implementation By Viktor Luhovyk POST STAFF WRITER

In a move which could hobble the newly adopted 1997 budget, Parliament voted Friday June 27 to postpone for one month the introduction of the new value-added tax law. The new bill will now come into effect on Aug. 1, rather than July 1 as originally expected.

Income from VAT accounts for over a third of the revenues side of the 1997 budget, which Parliament passed on Friday. Hr 8.45 billion of the Hr 22.4 billion total expected budget revenues are expected to come from VAT charged on goods and services.

Impetus for the delay came from the government: the Cabinet filed a request to Parliament to postpone the VAT law Thursday June 26, citing the lawmakers failure to pass a series of bills needed to pave the way for the new laws introduction. However, Finance Minister Ihor Mitiukov, who spoke during the budget debate in Parliament on Friday, did not specify what bills Parliament must pass before the VAT law can come into effect.

The decision to postpone the VAT law came as no surprise to many deputies: lawmakers have recently been predicting that both the tax bills passed earlier in the year, the VAT law and the law on corporate income tax, could be subject to amendments in the near future.

Parliaments Finance and Banking Committee Chair Viktor Suslov was prominent among those predicting that the VAT law would require not just postponement, but a major overhaul: Cabinet has not approved most of the 40 resolutions required to introduce the VAT law, Suslov said June 11. This will make introduction of the law much harder and we will likely have to amend it.

Predictions such as these are now close to being realized. In a sign that the VAT law, originally passed in April, may soon be revised, Parliamentary Speaker Oleksandr Moroz said Tuesday July 1 that the legislature will debate government amendments to the bill within the coming week.