While experts predicted the plunge, they expect a reversal as businesses, which no longer have any reason to hide their money, pay their taxes
budget revenues, which exceeded their projected target for the first quarter of this year, fell significantly at the start of April due to the abolition of the Kartoteka.
The Kartoteka system, which was adopted in December of last year, authorized tax officials to unilaterally withdraw money from the tax debtors’ bank accounts.
As of April 1, the law establishing the Kartoteka was abolished, but Mitiukov says that the government overlooked the fact that the State Tax Administration could still secure court decisions against deadbeat businesses, which would allow authorities the same access to corporate bank accounts that they had before with the Kartoteka.
According to Mitiukov, this gives companies no incentive to legalize their cash flows, giving the government another potential problem to work on.
Mitiukov said that budget revenues fell 30 percent below the government’s set target during the first five days of April, amounting to Hr 240 million instead of the expected Hr 340 million.
Mitiukov said government experts predicted such a fall would occur, but added that they also expected the trend to reverse as businesses boost their activity because they would no longer need to hide their money.
“We can say one thing now: the law is not yet working in full force,” Mitiukov said.
Budget revenues amounted to Hr 5.883 billion during the January-March period. This was Hr 494 million more than the Finance Ministry had planned for.
