Source – biz.nv.ua
The Ukrainian IT-sector requires a special tax regime.
Recently, the emotional evaluation of the IT-sector has been changed dramatically. It keeps the image of an economy segment, which is the most promising and rapidly developing one, but there have been increasing accusations that this sector is in the category of resource sectors exporting the “brains” while evading taxes. Is it true?
A middle class with high incomes is the basis of democracy
While assessing industries and economic events, you should answer a simple question: “Does it make ordinary Ukrainians richer?”. The economy has its specific purpose and value – high incomes of households, and a rise of incomes should be the main task. After all, the middle class is the foundation of a democratic society.
Therefore, the GDP, investments, Ukraine’s positions in various rankings are important factors, but not the main ones. They are interesting only because, overall, population’s incomes depend on them.
Currently, it is painful to see the main indicator of the economic efficiency (wealth of the population):
According to the Global Wealth Report prepared by the Credit Suisse Bank, nearly 24.6 million adult Ukrainians (35.4 million) are among the poorest twenty percent of the world’s population. We entered the anti-Top 10 countries in the world by this indicator.
According to the report, the poorest 20% of the world’s adult population are:
– 70% of the Ukrainian population;
– 57% of the population of Ethiopia;
– 30% of the population of India;
– 25% of the Russian population.
The poorest 20% of the world’s adult population
70% of the population of Ukraine
In such a critical situation, it seems natural and important to ask, “What will allow Ukrainians to become richer as soon as possible?”
Probably, right answers will contain such words as “institutions”, “ownership right”, “predictability” and others. We can not argue the sound receipt prescribing that “we need the rule of law” or any other similar answers. However, this way will take the decades, and we need the growth in incomes today.
IT is that particular sector dealing with the task of increasing incomes of Ukrainians under the existing environment. Why is it?
Rapidly growing and competitive
As a rule, in order to assess the general impact on the economic development in an unbiased manner, they consider a sector’s share of GDP, an amount of attracted investments, volume of exports and so on.
It should be said that the impact of these global criteria on income growth is rather indirect. For example, the increased share of the military sector does not mean improving the welfare of citizens (the USSR is a good illustration). And investments in various sectors have multipliers of creating jobs, which differ dramatically. For example, investing $180 million in the production and transhipping complex creates only 170 jobs, while their wages are hardly higher than the average wage in the country.
Therefore, I propose to assess the sector’s efficiency in creating a middle class in terms of average wages of people working there.
The export IT-sector (IT-outsourcing, IT outstaffing, RND-centers, etc.) is an absolute leader in terms of this indicator in Ukraine.
This sector creates jobs with an average salary, which is more than $2000 (according to the data of companies; relevant surveys). Each such job in the IT sector allows to earn ten times more than the national average.
However, a main number of employees involved in the export IT-segment is growing rapidly every year. While there were 42.4 thousand IT-specialists in 2011, now there are about 100 thousand.
It may seem that these figures are not as important for our great country. But according to the Ministry of Finance, in 2015, a rate of wages was as follows:
The statistics did not consider almost all IT pros, since they work as private entrepreneurs, often under foreign economic contracts. Thus, just the IT-sector created as many jobs as almost all other sectors altogether.
It is important that we are talking not only about small companies, but also about the large ones. Under the three-year economic recession, the armed conflict and migration waves, the largest players of the IT-sector systematically create new jobs with average wages that exceed 50 thousand hryvnas. And I remind that it actually creates the middle class in our country.
The growth of Big Five companies
(Source – dou.ua)
I wish to draw your attention to the fact that the average age of IT-outsourcing employees is 27 years, and they know at least the English language. This means that the middle class is growing allowing for mobile educated young people who may leave the country, but may stay in Ukraine if there is a decent work at home.
According to PwC, EBA and Luxoft forecasts, the number of people working in the export IT-sector will reach 140-180 thousand specialists by 2020; there are the experts who are more optimistic and talk about achieving the number of 200 thousand. That is, the IT-sector will create from 40 to 100 thousand new jobs with the average wage above 2 thousand dollars in the next three years. Considering the average size of households in Ukraine as 2.6 people, this fact will raise the living standards of 100 -260 thousand people dramatically.
A number of jobs in the IT-sector: 42.4 ths. 100 ths. 160 ths. 2011 2017 2020 (forecast)
A model of self-employed individuals slows the sector’s development
And we see the growing conflict here. Thus, the IT-sector is a leader in terms of investments in human capital. Expenditures on the service IT-sector staff are 50-80% of the cost structure. At the same time, in the sector of industry, labor costs sometimes do not exceed even 10% (prime costs – raw materials, equipment, etc.).
Therefore, India, Belarus and Kazakhstan adopted special tax regimes for the IT-sector.
Ukraine does not have a special tax regime for IT, and, in practice, it is replaced with the single tax.
How it works: companies enter into contracts with employees as with self-employed individuals and pay much lower taxes than with usual employment.
| taxes under model of self-employed individuals | taxes under employment contracs |
| 5% – single tax | 18% – personal income tax |
| 704 hryvnas – unified social tax | 22%* – unified social tax
*Is not paid from the salary part exceeding 25 living minimum wages (it is 38,600 hryvnas for today) |
| 1.5% – military fee |
It should be admitted that an average IT-pro pays almost the same amount of taxes as an average Ukrainian:
However, budget revenues from a single tax of IT-pros increase every year.
Dynamics of growth in taxes from the IT-sector
Although the model of self-employed individuals is convenient for IT-companies now, it does not allow the long-term planning and thus hinders the sector’s development. The reason is that the prospects of using this instrument are undefined on a nationwide scale. Relations with self-employed individuals can be qualified as the labor ones, or a system of regulating the single tax can be changed prohibiting IT-companies to use it. The published IMF Memorandum providing the strengthening of requirements to the simplified taxation regime starting from January 1, 2017 confirm chance of this negative for IT-sector scenario.
Therefore, the Better Regulation Delivery Office (BRDO) together with relevant associations and market players would like to consider possibilities to develop and implement a legal mechanism that will ensure the further development of IT-industry and create quality jobs in Ukraine.
The task of such a mechanism is to provide companies with long-term guarantees of stable tax conditions, which are competitive in the international market, ensure the creation of new jobs and increase the inflow of currency and tax payments into the country.
On April 25, 2017, the first regional roundtable “Moving towards businesses: simplifying the market access” with the participation of Valentyn Reznichenko, the Head of Dnipropetrovsk Regional State Administration, Joshua Badakh, the representative of EU4Business / FORBIZ in Ukraine, Oleksiy Honcharuk, the Head of the Better Regulation Delivery Office (BRDO), Valeriy Prokopets, the Head of Department on Business Development and Regulatory Policy of the Ministry of Economic Development and Trade of Ukraine, and Oleksandr Riznyk, the representative of the State Regulatory Service will be held in Dnipro.
A huge number of existing regulatory barriers, outdated rules and restrictions make it difficult for entrepreneurs to access the market and do not allow to realize the business potential.
What regulatory decisions should be taken to make market access conditions clear and understandable? How to establish a constructive dialogue between the government and businesses?
The goal of the roundtable is to find answers, analyze the regulatory framework and procedural problems and identify effective tools to improve the regulatory environment in cooperation with government officials, businesses, experts and the public. During the roundtable, it is planned to present the BRDO’s analytical study on this subject – the Green Paper “Market access restrictions” that was also presented for discussion in Kyiv in early April.
This event launches a regional concept of the Public Dialogue between the government and businesses to improve the quality of the business climate in Ukraine in terms of 18 key markets in 6 sectors.
The Ministry of Economic Development and Trade together with the State Regulatory Service initiated public consultations as an integral part of the regulatory reform to make rules for business effective and clear, and the process of their adoption – transparent and public. The independent analytical center BRDO is engaged in analyzing the existing regulatory environment and preparing proposals to implement the best practices and standards of effective solutions, which take into account the interests of Ukrainian businesses, in the regulatory decisions. The European Union provides support to the process through the FORBIZ project as part of the EU4Business initiative. More details on the initiative – click here.
The Roundtable program is available here.
! Pre-registration is required. Please confirm your participation till April 24, 2017 by using the registration form at the Platform for Effective Regulation regulation.gov.ua or by phone 063 440 47 07.
Accreditation of media representatives – till 18.00 on April 24, 2017 by calling at 099 256 59 56.
Place and time: Dnipro, the Dnipropetrovsk Regional State Administration (1, Oleksandra Polya Avenue), 10.00 – 12.00.
Your opinion is important! Join the discussion – together we will create simple and friendly solutions for business.
Yesterday, the Verkhovna Rada approved the draft law No. 4493 “On Electricity Market”.
In the context of the critical state of the energy sector, this decision is extremely important. After all, the stable competitive market should become a factor of attracting investments, which are so important for the generation of electrical energy, in the medium term.
In addition, the law No. 4493 contains principles of transparent and effective connection to the networks of electric distribution companies and reduces the monopolists’ impact on customers of connection significantly.
Moreover, the guarantees of state incentives for renewable energy, which is the only direction developed dynamically in the energy sector, are kept.
At the same time, the head of the energy sector Oleksiy Orzhel emphasizes that the efficiency of introduced competitive principles of this law will largely depend on its implementation.
“It is early for consumers to expect the immediate positive impact, since it can be achieved only when new participants and new capital enter the market,” Oleksiy Orzhel said and added that an energy regulator had to provide its proper implementation. However, it is still dependent and inefficient and the implementation of the new law will be delayed until its structure is changed.
“The regulator should be the next main political actor after the Verkhovna Rada in implementing this law in the functioning market realities. The market, in which 70% of thermal power plants are concentrated in the hands of one company and the amount of cross-subsidies between consumers reaches 45.8 billion hryvnas, which has a significant difference in prices between different types of generation with different forms of ownership and adjacent markets of which, in particular, the coal market, are uncompetitive,” Oleksiy Orzhel said.
The BRDO Office experts analyzed the reasons of postponing the implementation of the Association Agreement, particularly, as for the implementation of European legislation. The study was conducted in cooperation with FORBIZ, Association4U, Rada for Europe, SAFPI, IFSSU experts under the overall leadership of the EU Delegation to Ukraine.
A key focus – the analysis of the existing Ukrainian legislation that regulates the procedure of drafting and approval of laws and regulatory by-laws. Special focus was put on checking the compliance of draft regulations with the EU law.
On April 6, BRDO experts presented this study at a meeting with the Vice Prime Minister of Ukraine for European and Euro-Atlantic Integration Ivanna Klympush-Tsintsadze and the Head of the EU Delegation to Ukraine Hugues Mingarelli.
During the presentation, they discussed weak points of the process of adapting the Ukrainian legislation to the EU legislation, particularly in the sphere of legal and legislative procedures, and shared some ideas on how to address them.
As a result, they agreed that a team of experts who prepared the analysis and the Government Office for European and Euro-Atlantic Integration would cooperate to implement the study recommendations.
In the near future, the study will be also presented to parliamentarians.
The regulatory environment of the wood market is obsolete and ineffective. 10 of 44 acts are outdated and 6 of them are illegal. Most of the regulations, including the Forest Code, have been adopted in the 90s. It does not allow the market to develop and creates high risks of corruption. These points are the results of the analytical study conducted by the BRDO experts and presented as the Green Paper.
The Green Paper “Wood market regulation” includes all the problems of the sector along with the analysis of their causes. Key findings of the analytical study are:
These problems are compounded by a lack of funding, ineffective protection of forests and their restoration as well as by many other secondary problems.
The Green Paper launches online consultations in this area. After a series of consultations and round table discussions with all stakeholders in the forest sector, the issues included into the Green Paper will form a basis of proposals to change regulatory rules. Our goal is to find a balance between economic, environmental and social functions of Ukrainian forests.
You can read and comment on the Green Paper “Market access restrictions” here.
Your opinion is very important to us!
It is not enough to have a permit for land allocation to receive a land plot in Ukraine. Very often, there are situations when both businesses and citizens are denied land registration. Last year, land resources authorities denied in 135 thousand cases. The main reason – mistakes made while preparing documents.
Why so? This is because there is no standard form, which can be filled out with no hassles.
We have repeatedly faced with complaints of business owners on this issue, so we initiated a survey among the professional community, which is necessary to reduce a number of denials. More than 90% of participants said that it was a unified standard of land use documents.
The Better Regulation Delivery Office started to develop this standard. We are planning:
If you think that this list lacks certain questions – please, let us know about that by using this form.
Ukraine does not have license provisions on waste storage approved, while, for example, the tourist industry is regulated disproportionally to its potential impact on human life and health. This imbalance is just one of numerous examples of chaotic regulation of businesses in Ukraine. Ukrainian businessmen, government officials and experts discussed issues related to the market access regulation at the roundtable “Moving towards businesses: simplifying the market access” in Kyiv on April 4. This event gave an official start of the campaign related to the public dialogue between government and business, which aims to improve the state regulation and the business climate in the country.
The Ministry of Economic Development and Trade and the State Regulatory Service initiated public consultations as a necessary element of the regulatory reform to make business rules effective and clear and the process of their adoption – transparent and open. The independent analytical center BRDO organized public consultations and developed analytical materials as part of the EU4Business \ FORBIZ initiative. More than 100 entrepreneurs and representatives of business associations participated in public discussions.
As reported by the Better Regulation Delivery Office (BRDO), one-third of instruments regulating market access are used improperly, and 379 licensing documents don’t have any defined legal status at all. This not only complicates the interaction of entrepreneurs and the state, but also creates numerous opportunities for corruption. The ineffective regulation is expensive: just improper licensing costs 900 million hryvnas for businesses annually.
“The deregulation is still one of the priorities of the Government. We have abolished almost 500 obsolete and illegal acts in the last 6 months. In the future, we have to introduce a system of effective regulation that will prevent the creation of counterproductive regulatory practices at the national level. This is possible only in the process of constructive dialogue between businesses and the government,” the First Deputy Prime Minister and Minister of Economic Development and Trade of Ukraine Stepan Kubiv commented on this event. While opening the public consultation, the Deputy Minister of Economic Development and Trade of Ukraine Mykhaylo Titarchuk said, “When entering the market, small and medium businesses are facing with a number of unnecessary barriers, obsolete rules and unnecessary restrictions. We have no illusions that we can simply abolish all this. We approach the regulation problem in a consistent manner. Public consultations in the form of roundtables and online consultations on the basis of the newly created Platform for Effective Regulation PRO will allow to involve those who need it most of all – Ukrainian entrepreneurs – into identifying problems and developing solutions”.
“Low quality decisions that regulators take is a sore point for small and medium businesses. A year ago, we adopted the updated Methodology of regulatory impact analysis requiring the regulators not only to foretell the regulation effects for businesses and the state budget in detail, but also consult with the business community,” the Head of the SRS Kseniya Lyapina said.
The leader of the European FORBIZ project in Ukraine Matthias Halder expressed his support for the regulatory reform. In his opinion, effective decisions are those ones that were developed in cooperation with all market participants. “The European experience shows that public dialogue between the state and all stakeholders is an integral part of an effective regulatory reform. Results oriented exchange of views and motivated involvement of the business community in the decision-making process is a way to create effective regulatory changes,” he said.
“Now Ukrainian business is a hostage of ineffective regulation,” the BRDO Head Oleksiy Honcharuk said. “The effectiveness is measured by the formula: progress in achieving goals divided by the amount of resources spent. However, according to our analysis, it is impossible to define the goal of more than 95% of existing regulatory documents. Effective regulation is a prerequisite for business development, job creation and economic growth.”
The experts of the Control and Supervision sector have found 661 cases of using instruments to restrict the markets access, and the provisions providing these restrictions are in 943 regulatory acts. At the same time, the regulatory environment is of poor quality. Analysts have identified four key issues on regulation of market access:
The BRDO experts believe that the procedures to use instruments regulating the market access are also inefficient, and these instruments are used improperly. The experts proposed to develop the Methodology of using instruments restricting access to markets, which will prevent the officials’ subjectivity and abuses in the process of choosing appropriate regulatory instruments.
Regulating the market access through licenses, declarations and permits is aiming at preventing threats to human life and health, the environment or national economy.
About public consultations
The Ministry of Economic Development and the SRS as well as other ministries assisted by the independent analytical center BRDO and supported by the European Union involve the business and expert community in discussion of regulatory issues and their solutions in 18 key markets. Consultations will be held as roundtables in Kyiv and the regions as well as online on the Platform for Effective Regulation PRO at http://regulation.gov.ua. BRDO experts identify the issues of market regulation in analytical “Green papers”, and they will prepare “White papers”, which will form the basis of specific regulations, according to the results of public consultations. Thus, the business can be involved in forming the regulatory policy at the stage of its development.
About BRDO
The BRDO (Better Regulation Delivery Office) is an independent analytical center that forms the agenda related to regulatory development to establish a level playing field favorable for business development. The organization was created as a result of the initiative of reformers within the Government funded by international donors to solve the problem of lack of qualified specialists and experts the state requires to reform the regulatory system. The BRDO includes more than 60 Ukrainian experts on markets, lawyers and analysts who work with the MEDT, the SRS and other ministries and agencies to develop the regulation priority markets in a consistent manner.
About FORBIZ
The FORBIZ project is functioning as part of the European EU4Business initiative to support reforms in Ukraine and its economic recovery by offering system-based and reasonable changes for friendly business environment with a special focus on SMEs. The project helps to change the state policy towards the more recognition of SMEs and the role they play in the economic recovery. FORBIZ will focus on reducing the regulatory burden and risks to the business.
A series of unfriendly for business procedures in the oil and gas sector can be canceled this week. The draft law #3096, the adoption of which has been long awaited by the market, appears on the agenda of the Verkhovna Rada. This draft law simplifies the procedure for land use, abolishes the need to obtain a mining license and regulates the legal status of oil and gas construction facilities.
“Currently, the regulatory framework of this sector is outdated and burdensome for business. As a result, the energy industry can not be fully developed and increase the oil and gas production volumes, primarily for domestic use,” the deputy head of the Better Regulation Delivery Office Svitlana Kolomiyets said.
Key changes:
Subsoil users can start the extraction on timely basis, since the time to obtain land plots for oil and gas extraction will be reduced from 20 to 3 months.
Ensuring free access to wells by establishing the right of servitude.
Abolishing the need to obtain mining licenses, which is a Soviet archaism and does not have any controlling functions in the oil and gas industry. Instead, the subsoil use will be carried out on the basis of special permits issued by the state with the approval of local communities.
Introducing a single approval to remove and transfer of soils, which will significantly reduce the time costs of businesses. Today, obtaining a particular permit lasts about six months, although preserving the top soil was approved earlier, when the land has been transferred for use.
A well is not an urban construction object. Currently, due to a lack of clear definition of the status of wells, local authorities require registering wells as urban construction objects with mailing address assignment that lasts more than one year. According to international practice, wells are temporary facilities.
The Better Regulation Delivery Office hopes that this extremely important initiative will be approved and the market will have effective and transparent regulatory rules and all preconditions for development and investment attraction
The market of metal structures is a backbone of industry and construction. We start to review it together with the Ministry of Regional Development, Construction and Housing and Communal Services to make its regulatory environment more effective and friendly for businesses.
As part of this process, the Better Regulation Delivery Office invites all participants of the building metal structures market to take part in the survey to assess the implementation of the state regulatory policy in this market and the impact of regulation on the business development.
The analysis of responses will help to get a real attitude of the business environment toward the regulation of the building metal structures market, analyze the adequacy and reasonability of existing regulations in terms of business and prepare proposals on simplifying the business rules for the building metal structures market (including by reforming procedures, abolishing an excessive number of permits, reviewing permit/license terms, etc.).
This survey is conducted within the framework of the Working Group on the Rolling review of regulation at the Ministry of Regional Development, Construction and Housing and Communal Services.
To take into account the position of the business community when developing new rules of the market regulation, we offer to answer the questionnaire by following this link https://brdo.com.ua/opytuvannya-uchasnykiv-rynku-metalevyh-budivelnyh-konstruktsij/
The BRDO Office will prepare the recommendations from businesses that will be sent to the regulator for public discussion decisions development.
Today, at the briefing, the Head of the State Regulatory Service Kseniya Lyapina and the Head of the Better Regulation Delivery Office Oleksiy Honcharuk presented new online regulatory tools, which will allow conducting the regulatory impact analysis (RIA) and calculation of costs to introduce the state regulation (M-test) in a simple and effective manner.
“We created a new, modern electronic tool, which should help regulations drafters to fulfill their task effectively and efficiently,” Kseniya Lyapina said and added that this would allow not only to receive the regulatory impact analysis, but also involve the business and the public to prepare and assess the regulations. In her opinion, it will improve the business environment.
“A panel of presented tools is just a part of the Platform for Effective Regulation PRO that we currently launch jointly with the State Regulatory Service and the Ministry of Economic Development. It aims to make processes of drafting new regulations online and establish communications with the business,” Honcharuk said and added that everyone can take advantage of this service by visiting the portal www.regulation.gov.ua.
The head of the Rolling Review project Oleksiy Dorohan who presented online services at work noted that any regulatory rules should be measured in terms of their effectiveness and compliance with the goals set, so they would cause as little inconvenience as possible to those who perform them.
General information
The MEDT together with the SRS and with the assistance of the BRDO Office, supported by the European Union through the EU4Business | FORBIZ project, starts the annual program of public consultations for 18 key markets. The first green paper describing the issues of regulation of access to markets has been already published on the Platform for Effective Regulation PRO at regulation.gov.ua, and everyone can join online discussions. The next week, on April 4, we will hold a public consultation as a roundtable in the Club of Cabinet of Ministers, during which representatives of business associations and other stakeholders will discuss the green paper on markets access and the regulatory solutions proposed by the BRDO Office. This will be the first of 36 events in Kyiv and regions.
Are you an entrepreneur and deal only with goods that have no relation to weapons? Do not be so sure of that: there is an extensive list of ‘dual-use’ goods, which can be used to produce weapons while being also used for peaceful purposes. Export and (sometimes) import of such goods requires a complicated bureaucratic procedure without any guarantee of positive results.
Less than two weeks ago, the Cabinet of Ministers of Ukraine decided to remove 53 groups of goods from the Ukrainian List of dual-use goods making it a little closer to international standards in this area and simplifying the life of domestic enterprises.
This decision has not been published yet, but there are many myths created around it (mostly by government bodies involved) to stop the reforming process. I hope this reform will be finally accomplished, but now let me present five most common myths about dual-use goods to reduce the level of manipulation on this topic.
Myth 1. The List was created based on our national interests and its reducing will harm national security
In fact, the List was created and adopted based on interests of the international community with a view to prevent the use of dual-use goods to produce weapons abroad.
Of course, we should follow international precautions, but remember that a direct economic interest of Ukraine is to make this List as short as possible to enable Ukrainian enterprises to export the largest possible range of goods abroad, create jobs and receive foreign exchange earnings.
Myth 2. The List meets international standards
International lists of dual-use goods are annually updated. This is natural: products with characteristics that impressed experts in 2010 are often no longer surprising even for schoolchildren. The Ukrainian list of dual-use goods has not been updated and has not taken in account technological developments since 2010. Currently, it is extremely outdated while being an unjustified barrier to trade.
Myth 3. Ukraine included goods, which are not provided by international lists, in the List, and that’s fine
Theoretically, including own national points in the list is really a normal international practice for countries, which put their concern on trafficking in weapons abroad above their economic interests.
However, Ukraine not only included additional goods in the List at the expense of own economic interests: we also added goods that are not related to dual use to this List. For example, endoscopes or X-ray systems – they can not be used to make weapons and no one can explain why they were included in the List. Adding miniature cameras and camera recorders to the List makes it impossible to create modern enterprises producing electronic devices in Ukraine.
Myth 4. Reducing the List will lead to the uncontrolled distribution of special tools (e.g. for wiretapping) in Ukraine
There are existing licensing procedures to sell goods for special purposes in Ukraine. In other words, removing these goods from the List means just the abolition of duplicate regulation. Licenses for importers/sellers/users still remain in effect.
Myth 5. Reduced control will allow foreigners to wiretap, for example, Angela Merkel by using Ukrainian equipment
If Germany feared the wiretapping devices produced abroad, it would initiated making additions to the relevant international list or controlled imports of such goods on its border.
Ukraine should not worry about other countries when not wanted.
And, finally, we are patriots for sure, but to wiretap Angela Merkel… by using Ukrainian equipment… Well, you understand.
Source: biz.nv.ua
Ukraine is in the top 10 countries producing metal, but wastes its opportunities. 80% of Ukrainian metal are sold abroad as raw materials, and only 20% are used to produce more complicated products such as construction metal structures.
Our country has all the conditions to increase volumes: an excess of raw materials for production (it is just 500% of raw steel remained after domestic consumption), the strong production capacity and the convenient country’s location in terms of main potential sales market. Instead, we import metal structures for construction from other countries spending more than 1 billion hryvnas annually.
One of the reasons for this situation is a clogged and outdated regulatory framework. For example, the standards still contain instructions to use enamels and primers, which have been took out of production long ago. The BRDO experts collected all regulatory gaps of the metal structures market and the analysis of their causes in a research study – Green Paper “Rolling review of the state regulation of the Construction metal structures market”.
The experts of the BRDO’s Construction sector believe that regulatory changes should be the basis to simplify the market access for business representatives and introduce modern technological solutions in construction. Harmonization of the national legislation with the European one will allow to start using international technical regulations, and reduce non-tariff barriers to develop export-import operations. As a result, the change of rules will provide the opportunities for production and construction of modern infrastructure facilities: bridges, railways, ports; technological industrial buildings; high-rise residential and commercial buildings: shopping centers and residential buildings. These products will be both on the domestic market and for export.
We start a Public dialogue, the first stage of which – online consultations with all stakeholders in the sector of metal structures. The results of public consultations will form the basis of proposals on legislative changes in the market.
Learn about the study results in the Green Paper “Rolling review of the state regulation of the Construction metal structures market” and leave your comments.
Your opinion is really important to us and the development of the business environment in Ukraine!
“The main problem of our regulatory system is that Ukraine has one foot in the Soviet system. As a result, we have burdensome rules and artificial barriers for business, and the gas production industry is no exception,” the head of the Better Regulation Delivery Office Oleksiy Honcharuk said during his speech at the panel discussion “The strategy of gas production development in the context of energy security of Ukraine”, which was held today as part of the II Ukrainian Gas Investment Forum.
According to Oleksiy Honcharuk, BRDO experts see a lot of potential in the reform of the regulatory framework of the gas production industry and have specific achievements in this regard. He mentioned 5 main problems and possible solutions, including:
– geological information should become a valuable product, it shouldn’t be bought in a mandatory manner and sold on the basis of additional approvals;
– obtaining a special permit should cease to be a fiscal transaction;
– auctions should not be an instrument to fund the budget, they are an instrument of competitive access to shared limited resources;
– businesses should have the right to define the standards to assess their resources, the StateGeoCadastre should be demonopolized while creating a market of accredited entities;
– special permit for subsoils should not be an administrative document, it should be a legal transaction and the right of subsoil use – an asset that can be sold or give it as a pledge to a bank;
– it is necessary to finally define the role of local government bodies in the process of approval. The existing model when entities should contact collegial bodies and persuade them to sign a piece of paper encourages corruption.
According to the expert, the above mentioned problems can be resolved at the level of secondary documents. “However, some things require to amend the laws and the Subsoil Code. We together with the professional association and colleagues from gas producing companies are currently working on this issue,” Oleksiy Honcharuk said.
When entering the market, small and medium businesses face with a number of barriers, outdated rules and restrictions. These are the conclusions of the analytical study “Market access restrictions” prepared by experts of the Better Regulation Delivery Office (BRDO) as the Green Paper. It is the first one of 12 planned activities as part of the revision of regulatory methods.
A key focus of this study is dedicated to the finding and analysis of legal and procedural problems as well as issues of excessive and burdensome use of regulatory instruments.
The Green Paper introduces online consultations on issues of market access while being a starting point of the Public Dialogue campaign, which will focus on 18 markets in terms of six economy sectors: agriculture, construction, energy, transport, IT and telecommunications.
Visit http://regulation.gov.ua/book/4-dostup-na-rinok to read and comment on the Green Paper “Market access restrictions”.
Your opinion is very important to us!
Today, the Cabinet of Ministers of Ukraine held a “Deregulation Day”, which resulted in abolishing a number of illegal and outdated regulations that restrict business activities.
“The state shouldn’t have artificial barriers forcing the business to invent the ways to get around rules,” the Head of the Better Regulation Delivery Office Oleksiy Honcharuk said. According to him, approved decisions initiated by the BRDO Office will allow the business to work in an effective and competitive regulatory environment, minimize corruption risks and save billions of hryvnias for business owners.
Thus, the Government has abolished 21 illegal acts and 23 resolutions in the sphere of state control and risk assessment criteria. This will significantly reduce the administrative burden and corruption risks when administrating conflicting rules.
Deregulations also affected the export of dual-use goods. In particular, now 53 product groups are free from excessive control.
In addition, they established clear rules for activities in air traffic area – license terms to carry passengers, hazardous cargo and wastes by air have been approved.
Key decisions also include the abolition of illegal restriction of construction permits validity periods and the reduction of the procedure for issuing such permits by three times. The BRDO experts estimated that this would allow to eliminate the corruption component in 30.6 million dollars in the next 5 years.
Moreover, the Cabinet of Ministers approved a draft law aimed at improving the investment climate in Ukraine. Its main provisions will allow to reduce the cost of procedures in construction by 10% and the term of bankruptcy proceedings from 3 years to 1 year, and simplify the registration procedures for newly created entities. In general, the adoption of the draft law will provide Ukraine with at least 40 positions in the Doing Business ranking and allow entering the TOP-30 of countries already in 2018. It is expected that the draft law will be submitted to the Verkhovna Rada the next week.