Two years of Volodymyr Zelensky’s Presidency – the summary from business

19/ 05/ 2021

May 20 will mark two years since the inauguration of Volodymyr Zelensky as President of Ukraine. Analyzing this period in terms of favorable changes for doing business, we would like to note nine areas in which there were positive developments of the state policy. First is the consistent work on unpopular decisions, namely de-shadowing payments in the retail sector by increasing business responsibility for non-issuance of fiscal checks and gradually expanding the mandatory use of cash registers, as well as the possibility of using modern cash registers in parallel with traditional cash registers. These also include the launch of privatization processes in the alcohol industry. For example, on July 1, 2020, amendments to the law on state regulation of alcohol production and circulation came into force, which provide for the granting of licenses to private enterprises to produce and export alcohol. In addition, there has been a decrease in pressure on businesses from market surveillance authorities as they were reduced of their powers to demand from businesses an inexhaustible list of documents during inspections, and so on. Second is the progress in the environmental and natural resources sectors: Ukraine has taken the first steps in joining the European Green Deal program and has begun negotiations on the application of CBAM to Ukrainian exporters. Besides, the first step has been taken in launching a market for greenhouse gas emission allowances, etc. At the same time, a legal basis was created for conducting a national forest inventory. Third is the continuation of work in the direction of digitalization of state services - the development of the Diia application, legislative regulation of online trade in medicine, and so on. Fourth is the facilitated adoption of laws that businesses have insisted on for years as they are fundamental for the launch of changes and unblocking of effective work in certain industries. These are draft laws On inland water transport, On veterinary medicine, On food safety and hygiene. Also, we should mention the Law of Ukraine, which introduces the mechanism of the authorized economic operator and On the regime of joint transit and the introduction of a new computerized transit system (NCTS). Fifth is the continuation of medical reform at the second (specialized) level of medical care. Sixth is the resumption of VAT refunds on exports of oilseeds (soybeans and rapeseed). It is worth noting that farmers have been waiting for this to happen for almost 2.5 years. Seventh is the harmonization of Ukrainian legislation with EU norms. This includes the launch of the market of private phytosanitary laboratories meaning private laboratories can conduct phytosanitary examinations for export. We hope that this year the necessary bylaws will be approved to allow private phytosanitary laboratories to perform the certain function of state control in the form of phytosanitary examination. Besides, Law №367-IX was adopted to enable the signing of the ACAA Agreement with the EU on mutual recognition of conformity assessment procedures and obtaining the so-called industrial visa-free regime. At the same time, the signing of the Agreement itself, which will significantly simplify non-tariff barriers to trade with the EU, remains an important issue for the business community which is still unresolved. Eighth is the abolition of certain rudimentary norms, for example, the mandatory maintenance of the Book of Complaints and Suggestions, the abolition of the four main fines related to cash discipline, and so on. Ninth is the launch of the land market. At the same time, fundamental problems remain unaddressed, namely the formation of an effective basis for a real fight against corruption, the proper functioning of the judiciary, and fair rules of the game. Furthermore. The business would like to draw attention to the following industrial issues which need to be tackled. The problem of illegal imports in the country still remains unresolved, which, on the one hand, creates unequal business conditions for law-abiding companies and, on the other hand, causes significant shortfalls in the state budget due to non-payment of necessary taxes and duties by unscrupulous entrepreneurs. Solving this problem requires a whole set of actions - it is the continuation of state policy on fiscalization of settlement operations, and the creation of civilized conditions for e-commerce, and quality reform of the state customs service, the fight against illegal markets (eg, of alcohol), and so on. Moreover, the business expects the continuation of the labor legislation and the pension system reform, a clear strategy for the next steps in health care reform, the start of environmental tax reform, and the continued digitalization of administrative services, especially in the regions. And, in general, the community would like to see fewer leadership rotations happening in various bodies and structures - because constant staff updates are unlikely to contribute to the quality and consistent reforms in the country and, as we see, stable rules of the game. There is also a lot to be done for better infrastructure development, for example, to adopt the Law On Railway Transport, On the National Commission for Transport Regulation, the Procedure for Compensation for Investments in Strategic Port Infrastructure Facilities. Also, there is still a lot of work due in the field of ecology and natural resources, as waste management reforms are currently thwarted, there is no opportunity to help companies with environmental protection measures (criteria for aid have not been developed), lacked enforcement of the Nation Plan on reduction of emissions from large combustion plants in the energy sector, because there is no funding provided by the state. Moreover, it is necessary to legislate the rules of sale of wood, aimed at providing raw materials to domestic woodworking enterprises, stimulating in-depth wood processing, and efficient use of forest resources. For its part, the European Business Association has repeatedly shared concrete proposals in these aspects and is ready to join the discussions in order to create comfortable conditions for doing business in the country. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

May 20 will mark two years since the inauguration of Volodymyr Zelensky as President of Ukraine.

Analyzing this period in terms of favorable changes for doing business, we would like to note nine areas in which there were positive developments of the state policy.

First is the consistent work on unpopular decisions, namely de-shadowing payments in the retail sector by increasing business responsibility for non-issuance of fiscal checks and gradually expanding the mandatory use of cash registers, as well as the possibility of using modern cash registers in parallel with traditional cash registers. These also include the launch of privatization processes in the alcohol industry. For example, on July 1, 2020, amendments to the law on state regulation of alcohol production and circulation came into force, which provide for the granting of licenses to private enterprises to produce and export alcohol. In addition, there has been a decrease in pressure on businesses from market surveillance authorities as they were reduced of their powers to demand from businesses an inexhaustible list of documents during inspections, and so on.

Second is the progress in the environmental and natural resources sectors: Ukraine has taken the first steps in joining the European Green Deal program and has begun negotiations on the application of CBAM to Ukrainian exporters. Besides, the first step has been taken in launching a market for greenhouse gas emission allowances, etc. At the same time, a legal basis was created for conducting a national forest inventory.

Third is the continuation of work in the direction of digitalization of state services – the development of the Diia application, legislative regulation of online trade in medicine, and so on.

Fourth is the facilitated adoption of laws that businesses have insisted on for years as they are fundamental for the launch of changes and unblocking of effective work in certain industries. These are draft laws “On inland water transport”, “On veterinary medicine”, “On food safety and hygiene”. Also, we should mention the Law of Ukraine, which introduces the mechanism of the authorized economic operator and “On the regime of joint transit and the introduction of a new computerized transit system ” (NCTS).

Fifth is the continuation of medical reform at the second (specialized) level of medical care.

Sixth is the resumption of VAT refunds on exports of oilseeds (soybeans and rapeseed). It is worth noting that farmers have been waiting for this to happen for almost 2.5 years.

Seventh is the harmonization of Ukrainian legislation with EU norms. This includes the launch of the market of private phytosanitary laboratories meaning private laboratories can conduct phytosanitary examinations for export. We hope that this year the necessary bylaws will be approved to allow private phytosanitary laboratories to perform the certain function of state control in the form of phytosanitary examination. Besides, Law №367-IX was adopted to enable the signing of the ACAA Agreement with the EU on mutual recognition of conformity assessment procedures and obtaining the so-called “industrial visa-free regime”. At the same time, the signing of the Agreement itself, which will significantly simplify non-tariff barriers to trade with the EU, remains an important issue for the business community which is still unresolved.

Eighth is the abolition of certain rudimentary norms, for example, the mandatory maintenance of the Book of Complaints and Suggestions, the abolition of the four main fines related to cash discipline, and so on.

Ninth is the launch of the land market.

At the same time, fundamental problems remain unaddressed, namely the formation of an effective basis for a real fight against corruption, the proper functioning of the judiciary, and fair rules of the game.

Furthermore. The business would like to draw attention to the following industrial issues which need to be tackled.

The problem of illegal imports in the country still remains unresolved, which, on the one hand, creates unequal business conditions for law-abiding companies and, on the other hand, causes significant shortfalls in the state budget due to non-payment of necessary taxes and duties by unscrupulous entrepreneurs. Solving this problem requires a whole set of actions – it is the continuation of state policy on fiscalization of settlement operations, and the creation of civilized conditions for e-commerce, and quality reform of the state customs service, the fight against illegal markets (eg, of alcohol), and so on.

Moreover, the business expects the continuation of the labor legislation and the pension system reform, a clear strategy for the next steps in health care reform, the start of environmental tax reform, and the continued digitalization of administrative services, especially in the regions. And, in general, the community would like to see fewer leadership rotations happening in various bodies and structures – because constant staff updates are unlikely to contribute to the quality and consistent reforms in the country and, as we see, stable rules of the game.

There is also a lot to be done for better infrastructure development, for example, to adopt the Law “On Railway Transport”, “On the National Commission for Transport Regulation”, the Procedure for Compensation for Investments in Strategic Port Infrastructure Facilities.

Also, there is still a lot of work due in the field of ecology and natural resources, as waste management reforms are currently thwarted, there is no opportunity to help companies with environmental protection measures (criteria for aid have not been developed), lacked enforcement of the Nation Plan on reduction of emissions from large combustion plants in the energy sector, because there is no funding provided by the state. Moreover, it is necessary to legislate the rules of sale of wood, aimed at providing raw materials to domestic woodworking enterprises, stimulating in-depth wood processing, and efficient use of forest resources.

For its part, the European Business Association has repeatedly shared concrete proposals in these aspects and is ready to join the discussions in order to create comfortable conditions for doing business in the country.

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