Presidential candidates supported TOP-10 business initiatives for enhancing business environment in the country
Presidential candidates supported TOP-10 business initiatives for enhancing business environment in the country
05 March 2019

Ukrainian business took a major step forward today — just before the presidential election, we managed to lay the corner stone in subsequent dialogue with a future head of the state. At the end of the year, Union of Ukrainian Entrepreneurs has developed, in cooperation with other business associations, a powerful programme of key initiates aiming at Ukrainian economy rehabilitation and has already made the presidential candidates promise to implement them.

"Campaign period is a new touchstone, a great opportunity to decide, which of the proposed economic reforms need prompt implementation. Our TOP-10 priorities developed jointly by 73 business associations of Ukrainian entrepreneurs from different regions of Ukraine representing different-sized business and are exactly such reforms. This is the first attempt of Ukrainian entrepreneurs to join forces and build, as a broad coalition, an open dialogue with politicians," noted Tetiana Palamarchuk, Acting Director of SUP.

As part of the Forum "Substantive Dialogue between Business and Politicians", business community (as three hundred Ukrainian entrepreneurs) held deep discussions with six candidates and their representatives. During the Forum, business representatives and Ukrainian politicians focused on discussing TOP-10 initiatives for the government to ensure their prompt implementation following the 2019 presidential election.
Key priorities, which became discussion agenda, included: imposition of tax on withdrawn capital, reduction of tax burden on payroll fund, necessity to fundamentally change outdated labour legislation, switch to paper-free technologies, unshadowing of the economy, demonopolisation of heat and electricity markets.

Candidates and their representatives de facto unanimously (except for Oleh Liashko's representative) supported the necessity of replacing corporate income tax with tax on withdrawn capital.
In particular, Nina Yuzhanina, authorised representative of candidate for the President of Ukraine Petro Poroshenko, was positive that the initiative was to be implemented in the nearest future following the results of negotiations with the IMF Delegation in March.

"We now have two prerequisites for the imposition of TWC acting to our benefit — we have ratified a multilateral treaty and have proved that liberalisation can sometimes be more fruitful than putting our foot down a fixed tax rate. For that reason, we are now resuming the negotiations and have no doubt in obtaining positive results,' she stressed out.

Furthermore, candidate's representative supported the reduction of tax burden on payroll fund.

"Rate reduction from 44% to 22% enabled business capable to come out of the shadows within its profitability rate to operate transparently. We should take the same steps in respect of the general burden on payroll fund to ensure that both UST and personal income tax do not exceed 25%," Yuzhanina said.

During the panel discussion, Oleksandr Shemiatkin, Co-Chairman of SUP Tax Committee, stressed out the importance of pursuing another business agenda issue — the reduction of tax burden on payroll fund for speeding-up the Ukrainian economy growth and improving investment environment.

"Business feels that these 40% (ed. — PIT+UST), which they have to pay, are too much burden on payroll fund in the context of open borders and labour outflows reducing our competitiveness. Reduction of tax burden on payroll fund and unshadowing are easier said than done, but it is a complex of reforms aimed at, in particular, reducing budget expenditure," Shemiatkin said.

According to Vitalii Lomakovych, authorised representative of candidate Yuliia Tymoshenko, the main issue is not the tax rate, it is the ways taxes are spent. However, speaker noted that the candidate he represented regarded high tax burden issue as debatable.

"We want to know what type of tax system the business wants. Extension of tax base will lead to reduction of tax pressure. We also should keep in mind the fundamental arrangements with the IMF," he emphasised.

Andrii Sadovyi said it was crucial to further reduce the burden of payroll fund.

"I believe that tax pressure needs to be substantially reduced. The economy won't grow, unless we do that," he noted.

During the Forum, Andrii Sadovyi publicly announced his support for all TOP-10 business initiatives.

In turn, during the Forum "Substantive Dialogue between Business and Politicians", Timur Bondariev, Partner at Arzinger and Member of SUP Board of Directors, discussed with candidates for the President of Ukraine the necessity to amend labour legislation as one of the business initiatives.

"Our work focuses on TOP-10 business priorities. The issue of labour law is one the entrepreneurs are often concerned with. We all understand that labour legislation of Ukraine is outdated, an atavism. We inherited our labour code from Soviet times. Although hundreds of amendments have been introduced, none of the Presidents of Ukraine dared to fundamentally amend this code so as to make it meet current demands," Bondariev stressed out.

Candidate for the President of Ukraine Anatolii Hrytsenko supported the necessity to drastically amend labour legislation and in general supported business initiatives.

"We need to adopt a new labour code not until the next presidential election, but for decades. Ten criteria formulated by business have the same idea: we need prompt and dramatic changes, even if they can reduce the ratings. We support these criteria and approaches proposed by entrepreneurs," Hrytsenko said.

During the "Substantive Dialogue between Business and Politicians", Serhii Badritdinov, CEO INTERTOP, Chairman of SUP Retail Committee, highlighted the importance of introducing paper-free technologies.

"Business has an initiative on introducing paper-free technologies. What we do now is taking papers from one department to another for signature, When we deal with state authorities, we are always required to submit certificates. Information must be provided on paper even if it is already available in registers," the speaker said.

In turn, Oleksandr Danyliuk, representing presidential candidate Volodymyr Zelenskyi, spoke on initiative implementation trends.

"In fact, it is prohibited to demand information that is already available in registers since 2014. It simply doesn't work. Hence, in addition to laws, we must change the procedures. And for that, we need people, who are up for changes. I fully support introduction of paper-free technologies," Danyliuk said.

Union of Ukrainian Entrepreneurs appreciates candidates' readiness for open dialogue and cooperation aimed at building decent economic future for Ukraine. We have heard support and have seen than candidates are ready to implement business initiatives We want to elect only the one is understands that economy is formed by business paying taxes, setting up new enterprises and creating workplaces. Union points out that the discussion will be continued just before the parliamentary election, since the entrepreneurs care about economic future of the country and are ready to work on favourable conditions for business to ensure economic growth.
 

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