In a rare move the Ukrainian Parliament last week sent the controversial Tax Code, already adopted in its first reading, for public discussion. The idea was speaker Volodymyr Lytvyn’s, who argued that the code is vital and the Cabinet of Ministers was obliged to organize discussion and collate the views of the public and pass them to the relevant parliamentary committee. However, the parliamentary opposition rightly argued that any public discussion should have taken place prior to adoption. One thing is clear for all to see: the Ukrainian tax system needs speedy and deep reform. After all, international ratings show that it is one of the most awkward and ineffective in the world. But if the truth be known criticism of the code has been coming thick and fast and from all sides and the optimism of the authorities is now waning.

The question now is whether this move is a genuine or merely a stunt because the government finds itself at a loss as to what to do now and pushed firmly into a corner. The other option was to do what premier Mykola Azarov advised and adopt it with all its imperfections and then work on ironing them out. All of a sudden the promised reforms, with tax changes being heralded an integral part, are a distant memory. And with the local elections set for the last day of October the authorities certainly do not want any banana skins to ruin President Yanukovych’s high opinion poll ratings. Back on June 22 Yanukovych promised adoption of the code in July. However, attempts to adopt it last week before the parliamentary summer recess failed. By July 7 Yanukovych was admitting that amendments are required and the code was unlikely to be adopted by autumn.

Oppositionist MP Arseniy Yatseniuk echoed a common criticism when he said it reminds him of tax laws of the 1990s, when the authorities tried to squeeze as much as possible out of business. MPs from all sides have knocked the proposals, as have business groups, for allegedly protecting big business at the expense of small and medium-size firms and giving dubious powers to the tax authorities and Tax Police. One thing is clear: at best the code has been kicked in the long grass and the holiday season is unlikely to be conducive for public debate. But the danger is that, with the state budget being sequestered to meet IMF demands and reforms, like tax and defence, being put off, and the new authorities trying to save face, desperately needed reforms will once again fail to materialize.

Up in smoke

A record haul of cocaine was discovered in the southern port of Odessa on July 5. The shipment of 582.35 kilograms, the largest in Ukraine´s history, is said to have come from Bolivia, with the cocaine concealed in scrap metal pipes. The find came just days after President Yanukovych had highlighted the problem of drug trafficking at a news conference where he showed drugs bought quite easily, he said, via the Internet. The drugs were then ceremoniously disposed of burning.

Yanukovych duly announced he has given law-enforcers two months to create an effective system to fight trafficking. Ukraine seems to be encircled by drugs from the East, a lot of which come via Russia, and from South America. The country’s porous eastern border does not assist this fight either. Yanukovych’s initiative deserves praise as it high time to fight an effective war on drug trafficking. Let’s hope that the system can act radically to ensure results, as the country is awash with addicts and suppliers.