Quote:
Originally Posted by leonidas
A large number of export-oriented companies complain that the state refused to issue VAT (value-added tax) refunds because of exponentially increasing foreign and national debts. In Ukraine the Commerce Code and the Tax Code clearly state that the exporting companies should receive VAT refunds to avoid a double taxation because their products are subject to VAT in the importing countries. [B ]The state, however, issues tax refunds only to few companies that supported President Yanukovich in the 2010 Presidential elections.[/B] Other companies have to pay a high price for their political views. One of the largest steel-exporters, Arcelor Mittal, plans to lay off thousands of workers if the company does not receive VAT refund in the amount of $312 million (2.5 billion UAH).
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This post should really be in my "Smart Money Rule of Government" thread because I argue here that governments are now weaker than the multi-national corporations, and that governments take them on at their own risk. Leonidas highlighted the issue of refusal by the current Ukrainian government to award VAT tax refunds to certain exporters. Yanukovich and his team have seemingly caused the predicted reduction of Arcelor Mittal's Ukrainian steel production as the most recent Reuters figures now illustrate (shown below).
President Yanukovich will now learn that if you take on Arcelor Mittals CEO Lasksmi Mittal (number 4 in Forbes Rich List - $28.7 Billion USD), that unless your extremely smart , you will probably be the loser.
Well done Yanuk, you have lost your country millions of dollars revenue and caused Ukraine's unemployment figures to rise.
KIEV, March 11 (Reuters) - Ukraine's largest steel mill,
owned by ArcelorMittal (ISPA.AS) (MT.N), reduced crude steel
production to 890,400 tonnes in the first two months of this
year from 948,500 a year earlier, the plant said on Friday. The following are details of production in the plant
COMMODITY JAN-FEB 2011 (tonnes) Jan-Feb 10 (tonnes)
Steel 890,400 ------------------------ 948,500
Pig iron 767,800 ------------------------ 840,200
Rolled steel 796,900 ------------------------ 833,200