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EBA discussed with the Minister of Finance the plans for business development in Ukraine

19/ 02/ 2021
  Consultative discussions still continue between Ukraine and the IMF even after the completion of the Funds’ mission last week. This was stated by Serhii Marchenko, Minister of Finance of Ukraine, during a meeting with the EBA community on February 18. According to him, the most important conditions for continuing Ukraines cooperation with the Fund are the settlement of the energy crisis, effective work of anti-corruption bodies, acceleration of judicial reform, implementation of the law on banking, and further budget consolidation. Ukraine also needs to continue to implement a thoughtful debt policy. According to the Minister, customs reform is also an urgent issue. A large-scale customs certification program will be implemented in the near future, after which contracts will be concluded with those customs officers who pass all necessary tests, and they will have their salary increased. Also, after successful testing, the officers will be included in the database of a single legal entity of the State Customs Service. The Minister called on business representatives to report violations at customs to overcome the shadow economy with joint efforts. The business community could not arrange a meeting with customs officials since October last year, although there were many issues about the work of the customs that need to be resolved. Thus, the Minister ensured the business that he will forward our meeting request to the head of the State Customs Service. Serhii Marchenko agrees that there are probably risks that the newly established Bureau of Economic Security will exert additional pressure on the business. To avoid this, it is necessary to meticulously oversee the work principles, personnel policy, organizational culture, and key operational mechanisms of this new institution. In his opinion, the activity of this body should be based on analytical and information tools. It was reported that as part of Ukraine’s environmental commitments, the Ministry of Finance plans to revise eco-tax rates, issue green bonds and implement Energy Efficiency Fund projects worth UAH 6.5 billion. The Ministry also announced that businesses will be able to carry forward losses from previous financial periods, but there will be time constraints for carrying out this operation. Regarding the tax amnesty, the Ministry of Finance has prepared a draft law that is currently being discussed by key stakeholders at the Office of the President of Ukraine. The draft law is expected to be submitted to the VRU promptly. Nevertheless, the business should expect the partial resumption of tax audits. It concerns mainly the audits that were suspended and incomplete due to the moratorium. Currently, the Ministry of Finance is not considering reducing the burden on the payroll. According to Mr. Marchenko, the reduction of the single social security tax rates should be conducted only as a part of the pension reform implementation. However, it is necessary to understand how rates will be distributed and what are the compensation sources for the reduced rate. The Minister informed that some problems are at the final stage of settlement, namely the abolition of import duties on personal belongings of individuals, labeling of cartridges for electronic cigarettes, and the abolition of over-regulation of customs and administrative procedures related to the passage of goods at seaports. At the same time, it was informed that a draft law on the implementation of Directive 40 on the regulation of the tobacco market, which falls within the competence of the Ministry of Health, will be soon submitted to the Cabinet of Ministers. The Minister also informed about the introduction of electronic excise stamps with a QR-code, with the help of which the State Tax Service can verify the authenticity of alcohol and tobacco products through special software. Business representatives also stressed that with the organizational change of the offices of large taxpayers in December 2020, companies find it difficult to learn relevant information regarding their tax accounts. In such a situation, it is necessary to get in touch with the Tax Service Contact Center. The European Business Association thanks the Minister for this open dialogue and willingness to cooperate with business!   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

Consultative discussions still continue between Ukraine and the IMF even after the completion of the Funds’ mission last week. This was stated by Serhii Marchenko, Minister of Finance of Ukraine, during a meeting with the EBA community on February 18.

According to him, the most important conditions for continuing Ukraine’s cooperation with the Fund are the settlement of the energy crisis, effective work of anti-corruption bodies, acceleration of judicial reform, implementation of the law on banking, and further budget consolidation. Ukraine also needs to continue to implement a thoughtful debt policy.

According to the Minister, customs reform is also an urgent issue. A large-scale customs certification program will be implemented in the near future, after which contracts will be concluded with those customs officers who pass all necessary tests, and they will have their salary increased. Also, after successful testing, the officers will be included in the database of a single legal entity of the State Customs Service.

The Minister called on business representatives to report violations at customs to overcome the shadow economy with joint efforts. The business community could not arrange a meeting with customs officials since October last year, although there were many issues about the work of the customs that need to be resolved. Thus, the Minister ensured the business that he will forward our meeting request to the head of the State Customs Service.

Serhii Marchenko agrees that there are probably risks that the newly established Bureau of Economic Security will exert additional pressure on the business. To avoid this, it is necessary to meticulously oversee the work principles, personnel policy, organizational culture, and key operational mechanisms of this new institution. In his opinion, the activity of this body should be based on analytical and information tools.

It was reported that as part of Ukraine’s environmental commitments, the Ministry of Finance plans to revise eco-tax rates, issue green bonds and implement Energy Efficiency Fund projects worth UAH 6.5 billion.

The Ministry also announced that businesses will be able to carry forward losses from previous financial periods, but there will be time constraints for carrying out this operation.

Regarding the tax amnesty, the Ministry of Finance has prepared a draft law that is currently being discussed by key stakeholders at the Office of the President of Ukraine. The draft law is expected to be submitted to the VRU promptly. Nevertheless, the business should expect the partial resumption of tax audits. It concerns mainly the audits that were suspended and incomplete due to the moratorium.

Currently, the Ministry of Finance is not considering reducing the burden on the payroll. According to Mr. Marchenko, the reduction of the single social security tax rates should be conducted only as a part of the pension reform implementation. However, it is necessary to understand how rates will be distributed and what are the compensation sources for the reduced rate.

The Minister informed that some problems are at the final stage of settlement, namely the abolition of import duties on personal belongings of individuals, labeling of cartridges for electronic cigarettes, and the abolition of over-regulation of customs and administrative procedures related to the passage of goods at seaports.

At the same time, it was informed that a draft law on the implementation of Directive 40 on the regulation of the tobacco market, which falls within the competence of the Ministry of Health, will be soon submitted to the Cabinet of Ministers.

The Minister also informed about the introduction of electronic excise stamps with a QR-code, with the help of which the State Tax Service can verify the authenticity of alcohol and tobacco products through special software.

Business representatives also stressed that with the organizational change of the offices of large taxpayers in December 2020, companies find it difficult to learn relevant information regarding their tax accounts. In such a situation, it is necessary to get in touch with the Tax Service Contact Center.

The European Business Association thanks the Minister for this open dialogue and willingness to cooperate with business!

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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