Today, we’re undertaking a complex of measures in state regulation of business processes to make sure that investors’ work is easy and beneficial. We think that to achieve it, it’s important to implement the president’s task that Ukraine has to move up to the top 100 of Doing Business ranking.
It’s compiled by the experts of International Financial Corporation of the World Bank and describes the business climate in one country or another. We understand that many international investors, when taking decisions to invest money into a particular economy, take a good look at the Doing Business ranking.
Ukraine’s dynamics in this ranking have not always been good. We achieved a significant leap in 2010 after starting systematic reforms and thus demonstrating openness to foreign capital to the world community.
By 2012, Ukraine was 152nd in this ranking, by 2013 – 137th. To be able to get to top 100, we have to shave off close to 40 points in a single year. So, how is the government planning to achieve it?
The Doing Business ranking is composed by analyzing a list of criteria, which include registration of businesses, protection of investors, the taxation system, the state position in issues of international trade, and so on.
This is why the government has developed a complex plan of measures in each of these directions. Once fulfilled, it will make the business climate much more favorable for the investors.
So, what is included in this plan? Firstly, a number of changes to laws regulating the opening of businesses. They include business activity without the use of stamps, publication on a single web portal of the information about businesses, including its registration with the Ministry of Income and Duties, their registration as payers of VAT and single tax, cancellation of any registration fee for the state registration of businesses and individuals as entrepreneurs.
We will also take steps to allow businesses to file documents for receiving VAT payer’s certificate directly to the state registrar. (Editor’s note: Currently, the VAT payer’s certificate is the only tax-related certificate still issued by the tax authorities, not the registrar. The change can potentially reduce the time and paperwork required for registration of businesses and changes in statutory documents).
Secondly, the plan has a number of measures for protecting investor rights. We are planning to increase civic responsibility of the officials (all the way to dismissal) for violation of investor rights, make improvements in regulations on stock companies, and so on.
Thirdly, the government is planning to speed up simplification of procedures for registration of property. In particular, the newly created centers for administrative services will be able to offer services for initial state registration of real estate. This removes several bureaucratic steps in property registration procedure as it exists now.
Fourthly, we will continue to liberalize the tax legislation. We’re talking about a reduction of VAT and simplifications in administration of this tax.
Fifthly, international trade issues will be improved. The government is planning to introduce the system for customs control, based on risk analysis and customs post-audit. As a result, we plan to reduce the number of inspections of goods and vehicles to just 5 percent of total traffic. Currently, this number stands at 15-20 percent.
Sixthly, our plan of measures includes simplification or regulations dealing with insolvencies of businesses. It’s partly laid out in the changes to the law “On Restoring Debtor Solvency or Declaring a Debtor Bankrupt,” but also we’re initiating an automated system for anonymous testing at qualification exams for liquidators, and so on.
These measures will be implemented by dozens of ministries and agencies of the central and local governments. We’re very optimistic, and one of the reasons is that in the early 2013, when Ukraine moved up 15 points in Doing Business ranking, the authors failed to include a number of reforms we have already conducted, which are aimed at deregulation and creation of favorable conditions for doing business.
This includes 52 new laws and 36 Cabinet of Ministers acts that came into effect on Jan. 1. Top this up with our action plan and its implementation, as well as a running dialog with experts of the International Finance Corporation and business organizations, and Ukraine’s prospects are looking quite attractive.
We’re working hard to make our nation’s business climate more comfortable for domestic and foreign investors. That’s because this is the only way to make a quality leap for the Ukrainian economy and improve its global competitiveness.
Serhiy Arbuzov is the first deputy prime minister of Ukraine.
