100 days of war – business overview
Today the war crosses the 100-day mark – and that was a period of grave challenges, adaptations, changes, losses and transformations for Ukraine as well as for business operating in the country.
These 100 days have shown the world the bravery of Ukrainian people and businesses in Ukraine. Thus, from what we see from the member companies of the European Business Association, most businesses have been able, as far as possible, to adapt to the situation and gradually resume their operations – learn more about it at the link. Obviously, the losses are enormous and amount to billions of dollars. Nevertheless, business is determined to hold the economic front, moreover – to contribute to rebuilding Ukraine after the war.
Thus, the European Business Association decided to summarize the changes during these 100 days that made it at least partially easier for businesses to work in this difficult time.
Electronic declarations were accepted as equivalent to the permits, customs clearance of goods was simplified, a moratorium was imposed on almost all business inspections (except for overpricing control, resumed inspections for VAT refunds, etc.), and mandatory use of electronic signatures was postponed, the obligatory labeling of non-food products in Ukrainian for the period of martial law was abolished, labor relations were simplified (the issues of indefinite leave, remote work, etc. were settled). At the same time, conditions have been created to reduce the tax burden on businesses that do not work or work partially. Moreover, the procedure for issuing permits for international road transport for business has been simplified, etc.
In the context of industries, for example, the state introduced the emergency registration of medicines from any country in the world (except the aggressor country) and the e-submission of documents for the registration of medicines. Besides, the administrative burden on agrarians during the war was reduced (the need to obtain a state sanitary and epidemiological examination conclusion for state registration of pesticides and agrochemicals was abolished; phytosanitary requirements for exports and movement of plant products through Ukraine were simplified).
Among other things, the negotiations on eurointegration have significantly intensified and during these 100 days, Ukraine has made a significant step towards European integration. Meanwhile, business and the country as a whole are very much looking forward to Ukraine’s EU candidate status in June – this would give the green light and motivation for further work.
Therefore, the EBA community sincerely thanks the President of Ukraine, the Prime Minister of Ukraine, the Government, people’s deputies of Ukraine, and local authorities for their courage, confidence, resilience, and willingness to stand with the country on all fronts.
At the same time, the European Business Association would like to draw attention to certain issues that still need to be resolved. Now the government is actively promoting the importance of resuming business, paying taxes to support the economy – and entrepreneurs are doing everything possible to do so. However, the followings are hindering effective work. The first issue concerns staffing and mobilization. In order to develop, fully work, and launch/resume projects, entrepreneurs sometimes need to go abroad – to negotiate, conclude agreements, agree on routes and contracts, etc. However, it is currently not possible for an entrepreneur to go on a short-term business trip abroad without being temporarily deferred from military service as a critical employee. However, such a deferral can be obtained only if there is a mobilization task for such a company. At the same time, there is no practical understanding of how companies can get these tasks which makes it impossible to travel abroad or make temporary deferral from military service. Therefore, it would be helpful to resolve this issue.
The second issue concerns currency restrictions. Surely, at the beginning of the war, the National Bank of Ukraine worked very professionally and efficiently to maintain macroeconomic stability. Currently, these restrictions are slowing down and sometimes suspending the work of legal businesses. Therefore, the EBA community hopes that these restrictions will still be reconsidered, as will the existence of the Critical Imports List. There are currently different approaches to the formation of the List; even within the European Business Association, we do not have a unanimous opinion on this. However, it is unlikely that we can restart the economy with deterrent measures.
The third issue is to increase fiscal pressure on business. For example, there has recently been an initiative to introduce a progressive scale of taxation and increase the tax burden for honest taxpayers, which, among other things, provides for an increase in taxes for some transparent businesses. Unfortunately, such proposals do not inspire confidence in the transparency of business cooperation with the government. And the increase in fiscal pressure is not timely. Moreover, the EBA has always advocated for reducing the tax burden on business. Recently, the EBA representatives discussed this idea with the authors of the draft law and, hopefully, we managed to convey the business position to the authorities. At the same time, we hope that such initiatives will no longer take place, as we understand that they are unlikely to be productive for the economy.
And the fourth issue is the need to unblock ports. Obviously, this is not only a call to the Ukrainian authorities but also to the international community.
Thus, Ukraine has demonstrated an unprecedented level of courage, patriotism, and the desire for freedom. And, obviously, Ukraine just has one key goal right – the victory we all very much hope for! However, it is important to think about how we can rebuild the country (what is already happening in this direction) and how to make the business environment in Ukraine more attractive, so that the investment flow as well as the population return back to the country. May we as a country become even more progressive!