Yanukovych has started to act

New president of Ukraine Mr Yanukovych has started to act and first he ordered a research or better say an audit of state budget expenditures as well as disbursements from the IMF loan facility. The audit order was given to a consortium of State Prosecutor and the Accounting chamber. President also complained that exporters get their VAT on an ad hoc basis and that the prosecutor should also look into that as well as into all the state officials who do not complain to the law of Ukraine.

All this is to create pressure on Julia Tymoshenko who is still a Prime Minister and refuses to quit. Verkhovna Rada will hold a vote of no-confidence on the governmnet on March 2, which is likely to be successful. So far Tymoshenko has reacted only through convening an extraordinary meeting of the Cabinet scheduled for March 1.

New president was also outraged by the tax administration's idea that the taxes could be paid by firms "voluntarily" 3 months in advance of the due date. Such a method is used by tax authority to manipulate with the cash flow to the budget in order to avoid state coffers getting sort of empty. Indeed, this method shold be avoided if Ukraine is to speak of restoring any kind of fiscal discipline.

Looks like until Tymoshenko is still in CabMin the State Prosecutor Medved'ko will be new president's de-facto both Minister of Economy and of Finance.

Cabinet of Ministers pumps up control over prices in pharmaceutical industry

During the meeting with reps of pharmaceutical business in Ukraine Yulia Tymoshenko, prime minister of Ukraine, ordered to create a coordination commission to check the fairness of price-setting in pharmaceutical industry. As of now no concept of price-setting apart from vague remarks of the prime minister has been suggested. However, prime minister told that if the price-setting is found unfair the licenses of drug stores will be revoked for good.

The commission will consist of reps of the Tax administration, Anti-monopoly committee, State inspection on price cotrol, and Association of producers of medical products. Source.

The price-setting mechanism for medical products in Ukraine is a question of corruption for a long time, esp. when the government agencies buy drugs at artificially inflated prices. However, back then no questions to price-setting mechanism were asked. Prior to presidential campaign the government played the card of "flu epidemics threatening the nation" and drug-stores became the culprits of deficit and speculation with flu prevention drugs. Following the scandals with drug-stores getting filthy rich speculating on first aid drugs the government continues to develop the story increasing its intervention in and discretionary power over the pharmaceutical business in Ukraine.