Archive for January 21st, 2013


NBU preparing to put limits on cash transactions

January 21, 2013

Well here is something that appears logical but is very likely to be highly ineffective – unsurprisingly when it comes to Ukraine.

The NBU is planning to put a limit on cash transactions – that limit being UAH 150,000 (about $18,000), in an effort to fight the shadow economy.  One assumes transactions of a higher value will have to be electronic transfers.

A reasonable suggestion prima facie, however, when I think about what I have bought since being in Ukraine that required hard cash exceeding UAH 150,000, it has only ever been land, apartments and cars or selling houses built upon the aforementioned bought land – all of which have been subject to the correct taxes as they have involved notaries for houses/apartments and car dealerships for the cars – and with such major cash purchases I wanted the right documents so I was happy to pay the taxes insuring no shortcuts (and future problems) by doing everything completely legally.

I have spent far, far more on items that would not come even close to this UAH 150,000  figure in cash purchases – cash that will have circumvented the tax system due to will of the proprietor from whom I have bought these goods.  However if their combined total were accumulated, it would achieve figures into the millions of UAH with ease.

Quite how this NBU proposal will move those tens of thousands of smaller transactions from within that shadow economy out into the light I am not sure.

Just how much of the shadow cash economy does the NBU think occurs over the threshold of UAH 150,000 transactions, in comparison to those that fall under that amount across the nation on a daily basis?

The famous/infamous 7 Kilometer market in Odessa turns over about $20 million a day – in cash – and there is absolutely nothing you can but there that comes close to UAH 150,000!


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