Ukrainian President Leonid KUCHMA calls value added tax (VAT) one of the most criminalized taxes. He said this yesterday while opening a meeting on VAT issues. \n \n"The progressive aspects of VAT - its non-cumulative and compensatory nature - are being used for the benefit not of the budget, but of semi-criminalized business," said the President. \n \nAccording to him, last year out of UAH 33.2 billion of accrued VAT, UAH 21 billion, or almost 70%, was declared for reimbursement, and taking into account the reimbursement arrears of UAH 7.5 billion, the VAT balance amounts to only UAH 4.7 billion, or 14% of the accrued amount. \n \nL. KUCHMA noted that over 5 years, VAT reimbursement claims have grown 3 times, while budget revenues have grown only 1.5 times. \n\n"VAT is eating itself up. And the government just watches - what will come of it?" asked the President. \n \nL. KUCHMA stated that VAT feeds the shadow economy, especially in foreign economic activity, wholesale and retail trade. \n \nThe President noted that over 5 years, the growth rate of VAT reimbursement declared by exporters is 2 times higher than the growth rate of exports. \n\n"Exporters account for 36% of privileges and 20% of the VAT amounts declared for reimbursement. And there is no proper control," said the President. \n\nL. KUCHMA recalled that last year 5,000 attempts to groundlessly obtain VAT reimbursement from the budget worth UAH 1.3 billion were detected. \n\nHe also noted that there are many VAT abuses in trade, mainly wholesale, where 60% of turnover is resale, as well as with the "zero" VAT rate in free economic zones and territories of priority development. \n\nIn this connection, the President stated that the government has not seriously tackled the resolution of VAT problems. "Measures to resolve VAT problems are half-hearted, aimed not at the cause but at the consequences," said the President. "I expected that the government would seriously tackle the resolution of this problem, but I did not live to see it," he added.