The UAC, together with other leading business associations, addressed Prime Minister of Ukraine Denys Shmyhal and the heads of the relevant parliamentary committees with proposals to solve key economic issues.

In particular, experts note that the optimal model of the economy for the period of martial law should be a hybrid one. On the one hand - the planned (mobilization) economy in terms of military needs and military goods, as well as, if necessary - vital goods and services in places where their supply is limited. On the other hand, the emphasis should be on the liberalization of business, nowadays it must meet the needs of the population.

Among the proposals of the experts:

General

  1. To abolish import duties on raw materials, which is needed for the production of Ukrainian goods, simplify customs control with such goods. Gradually expand the list of critical imports, first of all by adding any raw materials from which Ukrainian goods are made.
  2. To limit the possibility of deferred payments for food products sold in retail chains of Ukraine, in accordance with European legislation (no more than 30 days deferral).
  3. Simplification of all regulations, in particular: a) significant simplification of Labor legislation (draft law №5371 - to adopt in general) with additional temporary provisions on remote dismissal and employment (option is - a suspension of most articles of the Labor Code), abolition of the minimum wage; b) replacement of fiscalization of all 2 and 3 groups of the single tax with fiscalization of exclusively risky payers (draft law of the Verkhovna Rada under the President’s Office); c) significant simplification of market surveillance (draft №5473) (option is a suspension of market surveillance during martial law); d)to remove state regulation of prices, except for special purpose goods on a separate list.
  4. Consider the possibility of a "regulatory guillotine" during martial law.
  5. Return to operation of the electronic VAT administration system with automatic refund, without blocking tax invoices.
  6. Strengthen responsibility for market collusion and monopoly abuse, especially for essential goods and services.
  7. Promoting the idea of ​​allocating special additional quotas for Ukrainian products by the EU and other partners (USA, Canada, Japan). Ensuring the promotion of the thesis "Buy Ukrainian in the EU" by the EU governing bodies.
  8. To liberalize tax legislation - replace income tax with withheld capital tax (companies will still have no profits, and the budget will be filled by external borrowing; as an option - with a temporary doubling of the rate during martial law to keep money in business) and reduce the burden on the wage fund (option - to abolish single social tax), reduce VAT on food to 7%.
  9. To postpone the implementation of the Controlled foreign corporation (CFC) for one year. To reduce bureaucracy when working with the CFC, in particular: to reduce the requirements for the preparation of the CFC’s report and the amount of information to be provided with the report - replace it with consolidated financial statements; the obligation to report should be made only for persons who own more than 25% of the share in the CFC; to expand and specify the list of exemptions for non-payment of CFC tax, in particular to specify the concept of economic and physical presence (substance) and increase the level of total income of all CFCs as a criterion for exclusion from the CFC tax.
  10. To reduce national expenditures, primarily through sectoral benefits and grants. To revise the State Budget, increasing the deficit and find sources to cover it, primarily by increasing rent payments through progressive taxation of excess profits.
  11. Creation of a double-circuit monetary system, within which "money" directed to the military-industrial complex does not come into consumer markets. This limits the growth of consumer inflation due to increased defense spending. The logic of developing such a financial mechanism may be to introduce a "digital defense industrial" hryvnia, which leaves a "digital" mark, or at least accumulates in special accounts, and accordingly is used only in the process of creating military-industrial complex products. Partially, Ukraine already has got an experience of such a mechanism usage. In fact, "COVID UAH1000" was created in the "virtual" space and aimed at consumption (usage) in certain areas (for example, this led to a boom in ordering books on specialized online platforms).

Sectoral:

  1. The agricultural sector and metallurgy - urgently provide an opportunity to export surplus products by railways, and to develop an emergency plan to provide wagong and corridors to the EU.
  2. Export industries. Settlement of the issue of recruitment to the Armed Forces of Ukraine of specialists in export industries (primarily IT ones) from the mobilization and public reserves, only after the complete closure of the needs of the Armed Forces of Ukraine from the first and second stages of the operational reserve. Unfortunately, the practice of mass recruitment of citizens from mobilization and civic reserves is widely used mainly in Western Ukraine for IT professionals who have moved from other regions. This situation poses a threat to the continued existence of the Ukrainian export IT industry and, consequently, a reduction in the amount of currency which continues come to the country's budget right now, during hostilities. It should be noted that in 2021 the IT industry has brought almost USD7 billion to the economy, and UAH23.5 billion in direct taxes paid to the state budget of Ukraine.
  3. Microbusiness, retail chains - to provide a certain amount for entrepreneurs who have lost assets in the

Communication:

  • To create a communication platform on which Ukrainian producers and small entrepreneurs could find each other and restore broken supply chains.
  • To create an international communication platform to support Ukraine's innovative business, including IT ones, and promote service orders from Ukrainian IT professionals.

Judicial:

  1. To ensure legality of the omission of claims recognition, including for newly discovered and exceptional circumstances. Expanding the list of circumstances recognized as newly discovered/exceptional circumstances due to the war.
  2. Destroyed court cases (especially commercial and administrative disputes) may be restored on the basis of copies of documents available to the parties (including those available as e-documents)

Psychological:

It is obvious that the aggressor is changing tactics and, among other things, is focusing his efforts on terror, including psychological terror in peaceful cities all over Ukraine. In a situation where sirens are constantly sounding in Western Ukraine at night, people are forced to sit for hours in bomb shelters - it is extremely difficult to develop economy there. It seems appropriate to develop more subtle air defense settings and public awareness to prevent depletion and further outflows.

Signatories:

  • Chamber of Commerce
  • Association of Taxpayers of Ukraine
  • Ukrainian Agri Council
  • Association of Small and Medium Business Owners
  • Business Community Board
  • Ukrkondprom
  • Ukrainian Manufacturers Association
  • Flour mills of Ukraine
  • Ukrainian Federation of Security Industry
  • National Retail Organization
  • Meat Importers Association
  • Ukrainian Association of Bakers
  • Association of Information Technology Enterprises of Ukraine
  • Association of Ukrainian Importers of Fish and Seafood
  • IT Association of Ukraine
  • Association of Importers and Dealers of Auto Components
  • Association of Pig Breeders of Ukraine
  • Software Association of Ukraine
  • Association of Private Employers
  • National Association of Insurers of Ukraine
  • Ukrainian Association of Capital Markets
  • Association of Milk Producers
  • Ukrainian Professional Association of Entrepreneurs
  • Foreign Exchange Market Participants Association
  • National Association of Dairy Producers of Ukraine "Ukrmolprom"
  • Business Association of Educational Institutions
  • International Business Association
  • Association of Ukrainian Manufacturers "Ice Cream and Frozen Products"
  • Women's Business Chamber of Ukraine
Tuesday, 15 March 2022

 

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