We believe that tax reform should fit in with long-term financial and economic goals of the state, courage economic development and investments, increase interest of entrepreneur and employer in producing cheaper products of higher quality.
Tax system reforming should be realised based on the principles of stability, flexibility, mandatory tax payment exclusively in money form; tax rates on production of goods and services that encourage producers rather than pushing them into joining shadow economy. Tax system should stimulate such type of distribution of peoples' income that would exclude wage-levelling and critical differences in salaries and income.
It is necessary to shift the emphasis from use of tax as means of budget revenue to the use of tax as an instrument of economic regulation. We consider it necessary to more efficiently use funds accumulated through budget and from other sources to undertake structural reforms in the economy, territorial development management and realisation of state target programmes. It is desirable that the process of decentralisation of federal reserves should be more profound and rights of regions in use of local budgets should be expanded.
Under conditions of lack of funds, the state should include the possibility of non-target use of funds, establish rigorous system of reporting and sub-reporting. It is necessary to significantly reduce and potentially prohibit support of loss-making costly production from the state budget, distribute state orders and carry out state procurement only through open tenders, and with the increase of people's income, to gradually reduce state subsidies and grants by ensuring their target nature.
To gradually decrease state debt, it is appropriate to undertake measures to improve foreign debt servicing and state guarantees.
We consider that it is well-grounded and reasonable policy to reduce domestic loans that can not be repaid and refuse from use of foreign loans to cover up current budget expenses. Taking into account national interests, dependence on international financial and crediting institutions should decrease.
We think that it is necessary to terminate the practice of federal financing by issuing guarantees to state organisations on commercial loans, introduce strict regime of fulfilment of debt liability undertaken to the state by subjects of economic activity that are involved in issuing state guarantees.
We are convinced that significant tax relief and strengthening of incentives in taxing can be achieved with the help of efficient issue policy that creates favourable conditions to preserve funds, accumulate them and transform into investments.
We believe it is needed to develop long-term concept of money supply mechanism that is co-ordinated with other macroeconomic factors.
We understand: stable hryvnia means stable economy. Strengthening national currency and expanding financial assets for capital investments are related to real financial valuation of tangible security of hryvnia. This valuation should serve the basis of transition to reasonably dozed and targeted emission policy aimed at strengthening real sector of economy. To avoid expanding ungrounded consumer demand and not to provoke price increase, it is appropriate to concentrate additional emission at the market of investing goods and physical components of capital investments. To strengthen hryvnia it is necessary to develop appropriate laws and regulations as to currency regulation and increase the amount of gold reserve of NBU.
Decrease of the tempo growth of real demand for money is due to setting high interest rates for securities, developing high dividend assets, issuing state investment securities that has passed financial and banking auditing and expertise.
It is impossible to strengthen hryvnia without resolving the problem of non-payments. It can be resolved, to our believe, by transferring payments into civilised form of relations between subjects of economic activity and specifically; in transferring non-payments into creditor's property or into highly liquid securities of a debtor that will require clear legal regulation of enterprise sanation and bankruptcy, stock market development and securities market.
Renewal of credit, monetary and tax and budget stability, taming inflation will contribute to enhancing trust and reliability to national currency and this will result in gradual dedollarisation of economy.
Normal functioning of market economy is impossible without wide use of bank credits in all its spheres. Increase of bank capital and its concentration, expansion of functions of universal banks and development of specialised - mortgage, land, investment, municipal and others - creation of modern bank infrastructure - these are main trends of improving national bank system. An important controlling role in this is vested with NBU.
We think that the primary task is to eliminate alienation of bank system from the process of transformation of relations of ownership and attraction bank capital to invest into production and priority fields of economy.
We will comprehensively contribute to elimination of legal barriers on the way to creating financial and industrial groups headed by banks that will carry out stock and direct investing, corporate, financial and investment projects management.