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 The only way out of major economic problems is through fundamental reforms, Jaresko says

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Head of the Ukrainian Ministry of Finance Natalie Jaresko told about factors that caused the economic crisis in Ukraine.

"First of all, Ukraine has a 74-year history of Communism and planned economy. Second, it's 23 years of unfinished reforms, poor economic management and failure to comply with the law. Third, the last five years of Yanukovych's rule, when national wealth was plundered at frantic pace. Fourth, it is a devastating impact of the war, which has lasted for a year," Finance Minister Natalie Jaresko said at a press conference in Washington, Censor.NET reports citing UNIAN.

A way out of the situation, according to the minister, is only through fundamental reforms in the energy and fiscal areas, open government, and respect of the rule of law.

The first step in this direction was the reduction of Naftohaz Ukrainy losses from $10 billion to $1.5 billion. According to forecasts, next year Naftohaz will cease being unprofitable. Experts called the Ukrainian monopolist "a black hole of corruption."

Read also: SBU and PGO conduct investigations in Naftohaz office - Lubkivskyi

"Nobody audited Naftohaz. We have released a report on the audit of the company in 2012 and 2013. The audit for 2014 will be ready in a few months. Today, Naftohaz is no longer a black hole of corruption. The government quickly adopted measures to remedy the situation and laid a new foundation for the activities of this company in the future," she said.

The next step is an increase in gas tariffs for the population of Ukraine by 450%, which will help energy efficiency and nullify the activity of corruption schemes in the distribution of natural gas. But this can be achieved only by providing subsidies to the public.

"The provision of social assistance to citizens in covering expenses is an important component in this process. This year we have tripled the funding of subsidies. Providing transparent subsidies to citizens of Ukraine is significantly better than non-transparent subsidizing of the state-owned Naftohaz company," the minister of finance said.

In addition, to revive the economy, the Ukrainian government carries out fundamental changes in taxation. According to Natalie Jaresko, this will lead to increased investment in the economy and will lead the company's operations out of the shadows.

Read also: Government intends to reduce the number of taxes from 22 to 9 and reduce tax burden on wages

"First of all, we are deshadowing the economy. For this purpose, we are introducing a break in the taxation of wages, so that businesses can come out from the shadows. We have also simplified taxation: the number of taxes was reduced from 20 to 11. We also announced a competition for the head of the tax service. Professionals are always needed. Additionally, we are closing tax loopholes for big business. Finally, we are introducing a new electronic system for the payment of VAT, which will increase transparency and reduce fraud," Jaresko said.

This fall, the government will propose a new tax law to the Parliament. The finance minister expressed hope that from Jan. 1, 2016 the country will have a new taxation system that will stimulate business.

Read also: Russian aggression in the Donbas costs Ukraine $5-7 million daily, Finance Minister says

Jaresko noted that the main tasks of her team are coping with the trauma caused by the war, putting Ukraine on its feet and making its economy work.

 
 
 
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