KYIV, Aug 2 – If the work of Free Economic Zones (FEZ) does not improve by the end of the year, the Economy Ministry will recommend that the Cabinet cancel them, First Deputy Economy Minister Viktor Kalnyk told journalists on Wednesday.
“Roughly speaking, a third of the regions do not use their leverage (the right to privileged taxation). We don’t want them to be paper zones,” said Kalnyk.
Kalnyk said that the ministry uses the following criteria to evaluate how effectively FEZs work: the number of investment projects, the volume of domestic and foreign investments, the profitability of the enterprises’ work, and budget indicators.
“We will make our proposals to the Cabinet on regulating the work of the designated territories that do not use this lever according to the results of this year’s work,” said Kalnyk.
Kalnyk named the Sivash and Donetsk region FEZs among those that are working successfully.
Ukraine currently has 12 Free Economic Zones, and a privileged investment regime has been introduced in nine regions.
The IMF considers a reduction in the number of FEZs one of the conditions for renewed financing to Ukraine.
At the end of June, First Deputy Prime Minister Yury Yekhanurov said that the Cabinet would determine whether it is expedient for FEZs to remain in place based on this year’s results.
