10 billion hryvnias – the forecast effect of the deregulation reform

The deregulation reform will allow Ukrainian entrepreneurs to save more than ₴10.2 billion. Such an economic effect will be achieved due to the cancellation and digitalisation of the instruments of state regulation of the economy, decisions on which have already been made by the Interdepartmental Working Group on Deregulation.

The amount of savings was calculated by BRDO experts, who joined the work of the IWG on Deregulation within the EU4Business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta.

❓ How did we calculate the preliminary forecast economic effect of deregulation for business?

BRDO analysts considered 5 main markets that will be affected by deregulation initiatives: agriculture, construction, IT and Telecom, energy and the sphere of the Ministry of Economy of Ukraine.

For calculations, the method of standard business costs (M-test, or the test of small-sized business) was used in accordance with the Methodology approved by the Resolution of the CMU No. 308.

The expected amount of savings from deregulation was calculated by comparing the financial and time costs of business to fulfill the current regulatory requirements and the new optimised requirements. In the case of digitalisation of the state regulatory instrument, we calculated the difference between the costs of business for two procedures – “paper” and electronic.

We did not take into account the material costs of entrepreneurs for the direct fulfillment of regulatory requirements. Only the administrative costs of the business were calculated – for obtaining primary information about regulatory requirements, organising their implementation, developing and implementing internal procedures, etc.

❓Entrepreneurs of which industries will save the most?

The economic effect of the deregulation reform will be:

  • for the agricultural market – UAH 8.5 billion;
  • in the sphere of the Ministry of Economy – UAH 1.4 billion;
  • for the construction market – UAH 268.5 million;
  • for the energy market – UAH 32.7 million;
  • for the IT and Telecom market – UAH 5 million.

Shortly, we’ll calculate how much money will be saved due to the abolition of outdated instruments of state regulation, and how much thanks to digitalisation, as well as which market areas will primarily be affected by the economic effect of deregulation.

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To remind, during the year of the deregulation reform, the Government reviewed 1,323 tools for business regulation. The IWG on Deregulation, created in January 2023, included, in particular, representatives of the Ministries of Economy, Digital Transformation, Environmental Protection and Natural Resources, Justice, Finance, and the State Regulatory Service.

BRDO joined the work of the IWG within the EU4Business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta with the financial support of the European Union. The content of this publication is the sole responsibility of SMEPIS and does not necessarily reflect the opinion of the European Union.