“Today business is facing a number of obstacles. The first and foremost of them on the eve of the elections is squeezing more and more payments,” complains Tetiana Ostrikova, a member of the Samopomich Union faction. And tells many such stories.
For example, recently, entrepreneurs have been facing artificially overestimated customs value of goods at the customs. In January, seemingly having noble intention of fighting smuggling, the State Fiscal Service introduced so-called “indicative prices”, which for some reason are called risk factors. Throughout entire 2018 an entrepreneur had been transporting chinaware at the price specified in the contract, for example, $1.7 per kilogram. The entrepreneur made payments from this contract price. But all of a sudden, in January, the customs office declares – from now on, you will make customs payments from $3 per kilogram because we have decided so. Even though this is the same product, the entrepreneur has the same contract, manufacturer, supplier, the same price, and he has been working this way for the last 5 years. Yet our authorities do not care about any of this on the eve of the elections.
Ostrikova is indignant: “Who defined this? How? Where these prices were taken from and how they were analyzed is unknown. The importer submits a declaration and since January their customs payments have already increased by several tens of thousands of dollars. And what should business do? You either pay. Or you will not pass. Or you can go to court.”
Another example of abuse is the pressure of security forces on virtuous business.
“When the agrarian season began, what did we encounter? There is a ship loaded with grain ready for shipment for export. And then suddenly the Security Service of Ukraine, the Prosecutor General’s Office, the State Fiscal Service report that the grain allegedly illegal and this issue should be carefully investigated. In the end, there is demurrage. In the meantime, business is forced to go to negotiate with the security forces and pay them a corruption reward.”
Ostrikova has also noted that there are a lot of complaints about the Security Service. Instead of fulfilling its most important functions and engaging in the fight against espionage, high treason, and terrorism, it only cares about making money. “These economic units, anti-corruption units are looking for treason in a wrong place – in Ukrainian business. Business says that in the majority of cases, successful participation in state tenders is impossible without a kickback for the Security Service. If you don’t pay it, you’ll have constant problems, criminal cases and searches.”
And then there is pressure through checks. When, for example, a company works completely within the legal field. It passed one audit from the tax office last year and in 2019 it was again included in the audit plan.
“How come some companies have no audits for years, while others undergo them every year?” Because there are intentions to actually find something and get some money for this. If nothing was found last year, we will come back this year again.”
Tetiana Ostrikova notes, “It is going to be even worse before the elections, because the authorities need money to secure their re-election for the following terms.”
What should business do? How to level this pressure? Here are a few simple steps that have been on the agenda of Samopomich from the very beginning of its election to the parliament, and they are in the program of presidential candidate Andriy Sadovyi.
1) To reduce the tax burden: to abolish the tax on profits, to introduce the tax on withdrawn capital. This will spare the tax office the possibility to interpret certain operations in a certain way – in terms of whether they relate to expenses or not. The inspector will have no possibilities for abuses.
2)To eliminate all economic divisions of law enforcement agencies that are currently ineffective (in the Security Service of Ukraine, the Ministry of Internal Affairs, the tax militia, and the Prosecutor General’s Office). Today, they all duplicate each other and are ineffective if we look at the funds that they bring to the budget. Instead, one effective financial investigation authority should be created. Let it be called the financial police or the financial investigation service, but the main thing is that this body should not be repressive. It should be analytically oriented. The new body should deal exclusively with crimes against public finances, without pressurizing ordinary business and horrifying all entrepreneurs.
3. Customs reform. What is happening at the customs is without exaggeration a nightmare. For example, now there is customs clearance of cars with European licence plates. There are huge queues, bribes and complete disorganization. And this concerns not only these cars but also those importing regular cargoes – they are forced to wait in enormous queues.
This should not be so, says Ostrikova, “Unfortunately, we have lost the customs service when it was merged with the tax service by Yanukovych in 2013. Now we have to create a proper customs administration, otherwise we will not join the EU. And if we plan to join at least the European customs union in the next 5-10 years, then we should have a customs administration, and not the remnants of the bodies engaged in bribery and controlled by local business barons. The customs must perform its main function –promotion of international trade and economic security of customs borders.”
Samopomich and Andriy Sadovyi have signed a memorandum “Economic Development of Ukraine” with the Ukrainian Business Council. The document provides for the adoption of reforms that will increase investment, will stimulate business to walk out of the shadows and will eliminate opportunities for corruption.
The main goal of such a coalition is to create an investment-attractive business environment, under which Ukraine will create a significant number of new jobs and Ukraine’s GDP growth will accelerate significantly.
Prior to this, Samopomich had also signed a memorandum with farmers who generate a fairly large part of foreign exchange earnings as a result of exports and stimulate GDP growth.
Samopomich has a common agenda with these two powerful business associations. The political force has been pursuing this agenda during this parliamentary term.
Ostrikova concludes, “We understand that presently Samopomich has 26 votes in the parliament, 226 are needed for the adoption of laws. Therefore, we must move forward, towards the victory in order to implement this agenda as quickly as possible as part of the unified democratic coalition in the new parliament.”