Ukraine Gets New State Property Chief
May 19, 2015
by Katya Gorchinskaya
KYIV -- Ukraine's parliament has appointed Ihor Bilous to head the State Property Fund despite a damning report on his performance in his previous job as the nation's chief tax man.
Bilous, who was nominated by Prime Minister Arseniy Yatsenyuk's cabinet, was confirmed with 258 votes in favor in the 450-seat parliament.
A former investment banker, Bilous is expected to oversee a massive privatization this year as head of the propery fund.
Eager to fill coffers drained by political upheaval and a 15-month-old war against Russian-backed separatists in the east, the government plans to make 17 billion hryvnia ($805 million) from the sale of state assets.
Bilous comes to the job clouded by questions over his stint as head of the State Financial Service, which oversees taxes and customs.
Appointed in June 2014, he resigned quietly in February after the end of a cabinet probe.
Amid a deep recession, the pro-Western government that came to power last year has vowed to simplify and reduce taxes to improve the business climate and stimulate the economy and investment.
But according to the findings of the probe, which have not been made public but were obtained by RFE/RL, the performance of tax and customs offices did not improve -- and in some ways deteriorated -- during his tenure.
The report said that administration of taxes became more complicated, not less. Ukraine is ranked 108th in the World Bank's Doing Business Report in administration of taxes. Its overall ranking is 96 among 189 countries.
The commission created by the government to conduct the probe, which included representatives of business associations, also came to the conclusion that Bilous failed to reform the cumbersome tax office and eliminate corrupt schemes inside it.
It said he failed to create an internal security department tasked with fighting corruption, as required by law.
Illegal trade in excise goods continued to flourish, and frequently tax and customs officials were complicit in the crimes, according to the report.
It said that arbitrary decisions on the return of value-added tax (VAT), a common problem for big business, has also persisted.
'We observed the negative practice of previous periods as to mechanisms of manual regulation of VAT refunds,' the report said.
Bilous stands by his achievements and says his performance was misjudged.
'You have to look at the real results over the year. Many things remained out of the limelight,' he told RFE/RL on the eve of the parliament vote.
On May 12, the government released a list of dozens of potentially attractive assets lined up for sale, including ports, energy distribution companies, and agricultural companies.
It gave the Economy Ministry and the State Property Fund a mandate to conduct a roadshow for potential investors before the sales.
Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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