Construction Association Urging Yuschenko, Tymoshenko To Halt VAT Payments By Individuals Buying Housing From Builders

The Ukrainian Construction Association is urging President Viktor Yuschenko and Prime Minister Yulia Tymoshenko to free individuals from payment of value added tax in the purchase of housing from builders, for a certain period of time.

Reporters learned this from Association CEO Lev Partskhaladze.

"We are offering this move to make housing more affordable," Partskhaladze said.

With this purpose in view, the Association is proposing amendments to Subparagraph 5.1.20 Paragraph 5.1 Article 20 of the Value Added Tax Law.

To overcome negative tendencies on construction market, the Association is urging Yuschenko and Tymoshenko to liberalize finance and credit mechanisms for building effort financing by way of withdrawal of Part 3 from Article 4 of the Investment Activity Law, reading that "the objects of housing construction financed with the use of nongovernmental funds drawn from legal entities and individuals, including for management, cannot be the objects of investment activity".

Beside that, the construction association is proposing liberalization of construction permit issue by settling with public the question of sale of land lots in auctions according to the 'single window' principle, enclosed with the package of documents containing territory development terms and restrictions.

In its open letter to Yuschenko and Tymoshenko dated September 25, the Association expressed its opinion of the negative dynamic in housing construction, and made proposals on overcoming it, having not yet received an answer.

In the association's opinion, if it is impossible to overcome negative tendencies on construction market, government programs for construction of affordable housing, bridges and roads will come under threat.

Dissatisfactory situation will also involve the construction of hotels, objects of tourist and entertainment infrastructure, which will finally impede the country's development.

Beside that, the Association says, this threatens Ukraine's preparations for the European football finals in 2012.

As Ukrainian News reported, earlier the Ukrainian Construction Association called for self-regulation of the building market, and initiated introduction of licenses for developers.

In February, the all-Ukraine Union of Producers of Construction Materials and Goods association signed a cooperation memorandum with the Construction Association.

Yuschenko set up a workgroup for construction of affordable housing in February.

In March, the Cabinet of Ministers set up a commission for consideration of proposals on the construction of affordable housing.

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