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Donetsk companies to stop paying taxes to budget after Kiev imposes economic blockade

December 04, 2014, 21:33 UTC+3 DONETSK

"After Kiev imposes blockade, those enterprises that used to pay taxes to Ukraine will pay them exclusively to the Donetsk People’s Republic,” Alexander Khodakovsky said

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© Michael Pochuev/TASS

DONETSK, December 4. /TASS/. Companies and businesses in eastern Ukraine will stop paying taxes to the Ukrainian budget once Kiev imposes economic blockade on Donbass, Alexander Khodakovsky, the secretary of the Security Council of the self-proclaimed Donetsk People’s Republic (DPR), said on Thursday.

“Before the blockade, there was a scheme under which we exist in a common financial and economic system with Ukraine, but enjoy political independence. After Kiev imposes blockade, we will change this system and those enterprises that used to pay taxes to Ukraine will pay them exclusively to the Donetsk People’s Republic,” he said, adding that the republic would find sufficient funds to fill its budget and fulfil its liabilities.

Negative effect on Kiev

The economic blockade imposed by Ukrainian President Petro Poroshenko against the self-proclaimed Donetsk People’s Republic (DPR) will have a negative effect on Ukraine itself, the republic’s Tax Minister Alexander Timofeyev told TASS.

“If they close the last Ukrainian bank working here, Oshchadbank, it means that the last enterprises in the republic that have paid taxes to Kiev cannot do it any longer. According to my data, 4.8 billion hryvnia (over $309 million) were transferred from the DPR to Ukraine over the past three months. So it is not known for whom it is worse,” Timofeyev said.

Kiev’s economic sanctions will create problems for DPR residents, but the republic’s authorities are ready to solve them, he said. “We have almost set up our own banking system and are ready for an economic blockade Ukraine threatens to impose against us,” the minister said.

Economic blockade 'inhuman'

Ukrainian President Petro Poroshenko’s decree on social and economic blockade of the country’s east is cruel and inhuman, the speaker of the Federation Council, the upper house of Russia’s parliament, said Wednesday.

“On the one hand, the Ukrainian authorities speak of necessity to retain Ukraine’s territorial integrity, on the other hand, they adopt such decisions, simply pushing part of the population, some regions out of Ukraine,” Valentina Matviyenko told a TASS correspondent.

“This is just madness,” the official said, adding that depriving residents of a large part of Ukraine of social benefits is very harmful for them.

She went on, saying that the economic blockade of the self-proclaimed Donetsk and Luhansk People’s republics is an attempt to shift the responsibility for developments in Ukraine’s east to the local authorities and Russia.

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