Ukraine Does Not Need A Civil War To Destroy It's Economy

An aerial view shows the Maidan Nezalezhnosti (Independence Square) crowded by supporters of EU integration during a rally in Kiev, Dec. 1, 2013. Ukrainian opposition leader Vitaly Klitschko addressed hundreds of thousands of protesters in central Kiev. Reuters

Who Needs Russia? Ukraine Will Destroy Itself With New Gas Tax -- Paul Ausick, 24/7 Wall Street

Ukraine doesn’t need Russia to take it down — Kiev is doing fine destroying itself, most recently with a new tax code that doubles taxes for private gas producers and promises to irreparably cripple new investment in the energy sector at a time when reform and outside investment are the country’s only hope.

Ukrainian President Petro Poroshenko on August 1 signed off on a new tax code that effectively doubles the tax private gas producers in Ukraine will have to pay, calling into question any new investment, as well as commitment from key producers already operating in the country.

The stated goal of the new tax code — a legislative package embraced by the parliament on July 31 with more than 300 votes — is to raise $1 billion, of which $791 million would go to fund the war effort in eastern Ukraine.

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My Comment: The corruption in Ukraine is bad enough .... but paying exorbitantly high taxes on top of the corruption .... for Ukraine's energy industry (and the only hope that Ukraine's overall economy can turn around) .... this has become the final nail in the coffin for any hope that this sector will expand. Besides this blog I do other things .... and one of them is advising certain corporate groups/companies in China, South Korea, and Switzerland on investment opportunities in Russia and Ukraine (and vice versa for certain Russian companies). Because of the dire economic and political situation in Ukraine certain business opportunities are opening up .... namely in real estate and resource development ... everything is cheap and if you the cash and patience your return can be enormous in 5 - 10 years. But as attractive as this may be .... I advised everyone two months ago to not get involved. From President Poroshenko on down the people who are now running the country are not interested in investment and expanding the economy .... their priority is to crush the rebellion in the east, and since that is not going to end anytime soon .... they are doing everything that is possible to fund the war by grabbing what they can .... increasing tax revenue, seizure of assets, using IMF and Western aid to fund their military, and .... to make matters worse .... making it clear to anyone who is listening that these measures are just the start.