Well who would have thought it?
Banks and financial instruments being used to avoid tax!
Well yes, we all would have thought it. We’ve all got fairly used to the idea that banks, financial markets and financial instruments are not the bastions of goodly deeds - regardless of which bank it is, where ever it is in the world.
And so it comes as no surprise to read that Oleksandr Klymenko, head of the Ukrainian Tax Service, has made this statement:
“Today only 11% of the turnover of securities is performed with the equities of real companies that are listed on stock exchanges. The other securities are instruments for tax evasion. Thus we see today UAH 1 trillion in securities turnover, while only UAH 150 million is paid to the budget.
An analysis of the data available suggests a high level of tax risk. Moreover, experience shows that stock market mechanisms are often used for tax evasion, and the concealment of income and information on the ownership structure of real sector assets, etc.”
The tax agency also noted that this year the share of unprofitable operations, according to official data from the stock market operators, reached 73%, and those at insurance companies were 88%.
According to the press service, the total amount of contracts executed by securities traders in 2011 amounted to UAH 2.2 trillion, including contracts worth UAH 235 billion signed on the organized exchange market. However, even with such a large turnover, the stock market operators reported extra large losses. Last year profits from trading in securities amounted to UAH 119 million, while losses stood at UAH 159 million.
So, I assume we are to see radical changes to this in the near future? Is there anyone bright enough within the RADA to understand this and actually come up with laws or regulations to put matters right? If there is, and they do, will it pass as legislation and if it does,will it be enforced?
With elections in October, I suppose we can safely presume that this will not be addressed before 2013 anyway.