Publication: Monitor Volume: 4 Issue: 152

An “expanded session” of the Ukrainian government, with 2,200 regional administration officials and state enterprise directors in attendance, opened in Kyiv’s Ukraina Palace on August 5. Chairing the session, Prime Minister Valery Pustovoytenko informed the gathering about the critical situation of the state budget and huge shortfalls in tax collection, and then proposed a stunning remedy. He announced that the officials whose institutions and enterprises are derelict on taxes were being sequestered inside the building until they sign legally valid pledges to pay up. The Security Service and police promptly blocked all exits from the building. The prime minister added in passing that the building’s toilets had recently been fixed up and were in good order.

Pustovoytenko offered the captive executives access to telephones and faxes, so that they could order their subordinates to complete the paperwork and forward the money. Those who refuse to comply face dismissal, prosecution and jail sentences, the prime minister warned. He adjourned the session until August 7, allowing the captives one working day–August 6–to comply. The government seeks immediate payment of 30 percent of the tax arrears to the Pension Fund and 5 percent of the tax arrears to the Chornobyl Fund. Many officials pointed out that payment in the amounts and by the deadline required would simply bankrupt their organizations.

An undetermined number of the officials signed the pledges, and the authorities lifted the siege of the building, reportedly at the personal initiative of Deputy Prime Minister Mykola Bilobolotsky. But Pustovoytenko, on an inspection tour of the provinces on August 6, expressed discontent with such lenience. He summoned all the officials back to the “expanded session” of the government, scheduled to resume today. (Radio Kyiv, UNIAN, Intelnews, Eastern Economist Daily [Kyiv], August 5-6)