Unfair competition, bribery, lies: the conditions in which Ukrainian businesses operate

By a member of the Parliamentary Committee on Taxation and Customs Policy, Tetiana Ostrikova.

Almost every day entrepreneurs who create small or medium-sized business in Ukraine face numerous problems. Months after months, Oblenergo are delaying considering applications for connection to the power grids, while water utilities – for connection to the water supply and sanitation. Some market traders are registered as a private entrepreneur and pay the single tax and the unified social tax, while the others are not registered and pay their employees off-the-books. Some legally deliver the goods from abroad paying all the taxes and customs duties, while others traffic illicit merchandise at much cheaper prices.

“Unfair competition, deceit on the part of the controlling and supervising bodies, unreasonable extortion of money, lack of information about available municipal premises and plots of land – this is the reality in which Ukrainian entrepreneurs are living, and it should not be so,” says MP from the Samopomich Union faction, member of the parliamentary Committee on Taxation and Customs Policy, Tetiana Ostrikova.

At the same time, small and medium-sized businesses are the backbone of any country, democracy and well-being of ordinary people. In Europe, small and medium business generates around 50% of GDP, while in Ukraine the figure hardly reaches 10%. The government must know what problems entrepreneurs are facing in order to create a favorable environment for establishment and development of business. Therefore, one of the priorities of the activities pursued by the Samopomich Union is liberalization of the economy and as little as possible government intervention into economic activity.

“If we do not stop the arbitrariness of officials, the situation will never change. We have hard-working and talented people; and if the rules of the game change, the percentage of self-employed people will grow,” Tetiana Ostrikova reassures.

The deputy noted that the problems of entrepreneurs need to be addressed both at the regional and national levels. Among local problems there are, for example, permissions for connection to electricity networks, water supply and sanitation, establishment of small architectural forms, fire department permits, sanitary and epidemiological service permits and the like.

The main obstacle in the tax area is total corruption and inefficient management of the State Fiscal Service. Therefore, the main issue on which the Samopomich Union faction insists is transparent competition for leadership positions in the State Fiscal Service, restructuring of the service, and elimination of the tax police, instead of which, by analogy with the National Anti-Corruption Bureau, there should be Financial Police established.

In addition, at the national level it is necessary to “close all the loopholes” at the customs, to establish a fair VAT refund system, create equal conditions for competition, both between private enterprises and public and private organizations. Following the principles of liberal economy it is necessary to make all services electronic, to make information public, transparent and available. Entrepreneurs need to possess a maximum of information in order not to fall into the trap of regulatory authorities, which often demand bribes.

According to Tetiana Ostrikova, during its last congress Samopomich Union MPs together with representatives of the regional branches examined in detail the main problems. And in this sphere the political force will be working to resolve the issues both at the level of local representatives, and in the parliamentary faction.

Comfort and trust

If there are transparent rules of entrepreneurship in the country, legal small and medium business will develop there, and therefore will create new jobs and fill the budget. And significant positive steps in this direction have already been taken.

Thus, at the beginning of their cadence the deputies of the faction authored a compromise tax law that allowed businesses to cleanse of the activities of the previous years, to declare on their own the obligations on income tax and value added tax, and pay only 5% of the obligations. In addition the rate of the unified social tax was fixed at the level of 22%, which reduced the tax burden on the wage fund almost by half.

For the further work and effective communication with entrepreneurs, the representatives of the party will work together with business associations and industry groups.

“Ukraine today is the state of officials and bureaucrats. If you want to start any business, you have to be a very experienced lawyer, to know which door to enter. Therefore, today we need to be advocates of entrepreneurs in a broad sense of the word. Lawmakers must be constantly using  the mechanisms of deputy’s requests, appeals, their right to immediate admission to any government bodies and their managers in order to help the business grow and make Ukraine the state of free and self-made people,” said Tetiana Ostrikova.


Tetyana Ostrikova
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