Business is appealing to the Ministry of Digital Transformation to support a law for the legalization and digitization of the used car market

26/ 07/ 2023

Recently, to further digitize the service provision processes by the Ministry of Internal Affairs of Ukraine, a decision was made to cancel the notarization requirement for the state registration when registering a new car at the dealership, to abolish the mandatory examination of license plates for all transactions in the automotive market, and to allow the retention of existing state license plates during the re-registration of vehicles for all transactions in the automotive market. At the same time, the Interdepartmental Working Group on Accelerated Review of State Regulation of Economic Activities, co-chaired by the Deputy Prime Minister for Innovation, Education, Science and Technology Development - Minister of Digital Transformation of Ukraine, Mykhailo Fedorov, recommended the cancellation of the dual state registration of vehicles purchased by businesses as goods for further resale. The European Business Association has already emphasized the need for deregulation and denationalization, particularly in the used car market, through law No. 9083. At the same time, the logic of the changes proposed in law No. 9083, according to the member companies of the Association, naturally complements the aforementioned government innovations, as deregulation of procedures only requires the abolition of the requirement for economic entities to register used cars under their ownership if they are purchased for further resale. Thus, the Ministry of Internal Affairs of Ukraine, responsible for vehicle registration matters, suggested an optimal mechanism in its proposals for law No. 9083. It suggests that car owners transfer vehicles to such economic entities with the registration already canceled, simultaneously legislating that these economic entities are not obligated to register the vehicles themselves. Therefore, the adoption of law No. 9083 will contribute to bringing a significant segment of the used car market out of the shadow economy, which, in turn, will provide additional substantial revenues to the state budget. According to estimates by member companies of the Association, bringing 50 thousand cars out of the shadow economy could, on average, generate about 1 billion UAH in additional taxes and fees for the budget. The business has already appealed to the Ministry of Finance and the relevant Committee of the Verkhovna Rada with a request to support the document. However, the European Business Association is currently reaching out to the Deputy Prime Minister for Innovation, Education, Science, and Technology Development - Minister of Digital Transformation of Ukraine, Mykhailo Fedorov, requesting support for law No. 9083 as it is seen as essential not only for denationalization but also for digitizing the sphere of used cars.

At the same time, the Interdepartmental Working Group on Accelerated Review of State Regulation of Economic Activities, co-chaired by the Deputy Prime Minister for Innovation, Education, Science and Technology Development – Minister of Digital Transformation of Ukraine, Mykhailo Fedorov, recommended the cancellation of the dual state registration of vehicles purchased by businesses as goods for further resale.

The European Business Association has already emphasized the need for deregulation and denationalization, particularly in the used car market, through law No. 9083.

At the same time, the logic of the changes proposed in law No. 9083, according to the member companies of the Association, naturally complements the aforementioned government innovations, as deregulation of procedures only requires the abolition of the requirement for economic entities to register used cars under their ownership if they are purchased for further resale.

Thus, the Ministry of Internal Affairs of Ukraine, responsible for vehicle registration matters, suggested an optimal mechanism in its proposals for law No. 9083. It suggests that car owners transfer vehicles to such economic entities with the registration already canceled, simultaneously legislating that these economic entities are not obligated to register the vehicles themselves.

Therefore, the adoption of law No. 9083 will contribute to bringing a significant segment of the used car market out of the shadow economy, which, in turn, will provide additional substantial revenues to the state budget. According to estimates by member companies of the Association, bringing 50 thousand cars out of the shadow economy could, on average, generate about 1 billion UAH in additional taxes and fees for the budget.

The business has already appealed to the Ministry of Finance and the relevant Committee of the Verkhovna Rada with a request to support the document.

However, the European Business Association is currently reaching out to the Deputy Prime Minister for Innovation, Education, Science, and Technology Development – Minister of Digital Transformation of Ukraine, Mykhailo Fedorov, requesting support for law No. 9083 as it is seen as essential not only for denationalization but also for digitizing the sphere of used cars.