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Ukraine Police Close Tax Protest Camp After Parliament Vote

Dec. 3 (Bloomberg) -- Ukrainian police cleared an encampment on Kiev’s main square this morning when tax protesters refused to leave after parliament approved a compromise proposed by President Viktor Yanukovych.

Protesters, mostly self-employed workers, weren’t satisfied with amendments to the new tax code and rallied into the night, demanding that Yanukovych veto the legislation, said Serhiy Fisun, a spokesman for the demonstrators. About 200 people stayed in the camp after the vote.

Berkut, the special police of Ukraine’s security forces, removed tents, a stage and speakers at 5 a.m. Officers acted on a court order to clean up the square, said Volodymyr Polishchuk, a spokesman for the Kiev police, in televised remarks. A Christmas tree is being installed at the location.

Protests in Kiev and other Ukrainian cities started Nov. 16 as parliament began discussing the tax code proposed by the government of Prime Minister Mykola Azarov. Thousands of self-employed workers, who make up 19 percent of Ukraine’s workforce, staged rallies saying the code would limit their ability to qualify for a flat tax and increase their average payments.

Lawmakers yesterday approved Yanukovych’s proposal to retain a simplified tax system for small entrepreneurs. Yanukovych said Nov. 29 that he would consider the demands of small and medium-size businesses.

The government needs the tax code approved as soon as possible to ensure revenue for the 2011 budget, which must have a deficit equal to no more than 3.5 percent of gross domestic product to comply with International Monetary Fund demands.

Ukraine is relying on a $15.2 billion loan program with the Washington-based lender as it seeks to spur economic growth after the country’s first recession in a decade.

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Willy Morris at wmorris@bloomberg.net; Claudia Carpenter at ccarpenter2@bloomberg.net.

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