The year 2019 will keep Ukrainian MPs busy seeking re-election for themselves and supporting their favorite presidential candidate.
Therefore, experts believe that during 2019 the Verkhovna Rada will be providing perks to citizens rather than ensuring good governance and economic growth in the country. The need to collect votes in the forthcoming presidential and parliamentary elections is the reason for such populistic stance.
But the Parliament also needs to do its actual job – passing laws that will help the country develop. Therefore, the Verkhovna Rada will consider legislation that promises to spearhead the economic and social development of Ukraine for years ahead.
Legal basis for state governance reform
Throughout the previous 20 years, Ukraine’s European allies have been prompting Ukraine to adopt modern governance standards and write them into law. Finally, on Dec. 28, the Cabinet of Ministers of Ukraine submitted the administrative procedure bill for parliament’s consideration. The draft bill is important because it will make the state and its authorities accountable to the citizens.
Viktor Tymoshchuk, an expert at the Centre of Policy and Legal Reform, believes that “this law will fulfill the citizens’ requirements put forward during the EuroMaidan Revolution for regulating citizens’ relations with the state, including those of the businesses and the state.”
Major economic laws pending
Artem Barinov, a tax expert at Schneider Group business consultancy, hopes that the Verkhovna Rada will pass a law on exit capital tax. Backers say the legislation can help the business and investment climate in Ukraine by simplifying tax administration and encouraging reinvestment of profits in the country. The chances for passing this bill seem good as President Petro Poroshenko submitted it to parliament.
Ukraine has recently simplified and liberalized its currency regulations. With the new currency law in effect, the country needs to prevent tax evasion and abuses, Barinov adds. Thus, during the first half of 2019, the parliament is supposed to adopt the tax evasion law known as measures against BEPS (base erosion and profit shifting). The National Bank of Ukraine and the Ministry of Finance have already developed and published the draft bill. Submission to parliament and adoption into law are planned for 2019. According to Barinov, BEPS legislation promises to prevent tax evasion without overregulating tax administration.
Supporting business growth
The European Business Association, with more than 1,000 members, supports laws aimed at providing special status to enterprises involved in continuous export-import operations.
“Such status will ensure that the customs checks are simplified for the approved companies. In return these companies will carry more responsibility,” underscores Igor Gotsyk, advocacy team leader at the EBA. Parliament also should simplify registration of tax invoices, Gotsyk said.
Illegal raiding of private companies has plagued Ukrainian enterprises and their owners for decades. To put an end to this deplorable practice, the Verkhovna Rada aims to pass the anti-raider bill. It will make the state registration procedures stricter and notarial acts more stringent. It also aims to cut the 1 percent notary duty so that unscrupulous notaries lose motivation for committing dubious registration actions with company incorporation documents.
Ukraine needs better legislation for public-private partnership projects. That is why the new law on concessions is important for developing public-private partnership projects and driving development of infrastructure in the country. The EBA hopes that the parliament passes the bill in 2019.
Although Ukraine has recently extended its moratorium on the sale of agricultural lands plots, it needs to pass the law regulating transparent and fair circulation of land plots. This legislation must be there before the moratorium falls, says Gotsyk. “It would be beneficial for business and development of the country, if the law is passed this year,” Gotsyk said.
Socially important but not populistic
Adopting a new labor code is important too. This law shall ensure fair employment relations.
The currently effective labor laws date back to the Soviet Union.
The new one “is not revolutionary, but it brings all the norms into one document and provides businesses with an opportunity to breath freely,” EBA’s Gotsyk said. “The law keeps providing favorable protection to employees rather than employers.”
The proposed labor code also cuts some of the trade union influence over the firing of employees and elevates the importance of labor contracts.
