Ukrainian Economy Ministry doubts need for extra 10% fee on foreign currency transfers

MOSCOW. Aug 19 (Interfax) - The Ukrainian Economy Ministry has called into question the necessity of imposing an additional 10% fee on foreign currency transfers abroad to pay for goods and services, First Deputy Ministry of Economy Denys Kudin said.

"This initiative is only being discussed. There is currently no uniform opinion here. As of today, the Economy Ministry has doubts regarding the necessity of introducing such a tax, as it may distort economic competition, and it is very dangerous," Ukrainian media quoted Kudin as saying during the national telethon on Friday.

The aim of this initiative is to balance currency glows, as imports have decreased insignificantly in the past few months year-on-year, while exports have dropped seriously, he said.

"This misbalance leads to a trade deficit. And all this puts pressure on the exchange rate and does not aid macroeconomic stability. The National Bank is looking for ways to balance the situation, and it is one of possible measures, but there is no consensus yet," Kudin said.

Holos faction MP Yaroslav Zheleznyak, in turn, said on social media that the Finance Ministry sent the relevant bill to the agencies concerned on August 5.

The Economy Ministry did not support the initiative, saying that the introduction of an additional fee would cause inflation to accelerate from 1.75% to 2.22% and would lead to a 0.4%-1.1% contraction of GDP, Zheleznyak said. As an alternative to this 10% fee, the Economy Ministry proposes considering terminating the simplified 2% rule for major businesses and returning them to the general system.