WORLD BANK issued its view of the new Ukrainian tax code in a press release earlier. The press release said the The Tax Code adopted by the Verkhovna Rada in December 2010, has some key problems in the Ukrainian taxation sphere, according to the World Bank. “Some essential problems of the tax and administration policy remain... [and] the new tax privileges reduce the tax base for taxes on companies' profit and VAT," reads a press release of the World Bank presented to the press in Kyiv on Thursday. According to the press release, the planned reduction in direct tax rates causes more difficulties from the fiscal point of view. The bank experts also said that the Tax Code did not make use of opportunities to settle problems linked to the existing liberation from VAT payment and special regimes, which were ineffective in stimulating of the economic activity or cutting of product prices in the past. Moreover, the new VAT scheme for grain and timber products acts as a tax on exports and could restrain growth in the sectors, the press release says. According to the press release, the Tax Code does little to cut the complexity and inconvenience of tax administration in the country.

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