How to abolish another 20 permits that hinder business

12-01-2016

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There are officially 82 types of permitting documents in Ukraine, and their actual number is much higher.

Some of them are unreasonable while being an excessive regulatory burden on business that contributes to bureaucracy and corruption.

The entrepreneurs have to wait for months to obtain some permits and start their work. Often, they have to pay bribes to speed up this procedure.

That’s why the action plan for deregulation approved by the Cabinet of Ministers provides the shortening the permits list by 25%.

The Better Regulation Delivery Office (BRDO) analyzed and improved initiatives of the Ministry of Economic Development and Trade and jointly developed a draft law on amendments to some legislative acts to reduce the number of permits together.

The draft offers to abolish 20 permits, the necessity of which is not explained with the concerns for public health, environmental protection or other critically important public interests.

With regard to the above mentioned, only a half of permits will be abolished. In other cases, the permitting procedure will be replaced with declaration. Hence, the state will obtain necessary information with the declaration and be able to control economic activities without creating bureaucratic barriers to start such activities.

It was planned to optimize almost half of permits at the beginning of the work on the draft law, but large-scale deregulation was impossible due to the need of harmonization of the Ukrainian legislation with the EU norms. Therefore, experts had to limit their plans to ensure the European integration.

 

To illustrate the importance of the draft law, a few examples should be given.

The Ukrainian companies have to obtain a license to provide the tourism services. At the same time, their online competitors – booking.com or airbnb.com providing similar services don’t obtain any permits and the state doesn’t control their activity.

This license turned into a formality long ago and its abolition will significantly simplify the running of business activities for entrepreneurs.

Here is another example. Law allows practicing the traditional medicine and healing, but in what way can a governmental body verify the abilities of a man? What should be the basis to give a permit or deny it? Should the state spend the taxpayers’ money on such a verification?

The state should only make sure that such activities don’t harm the health of citizens. However, this control can be maintained without obtaining a permit to get started with business. The declaration on the traditional medicine start-up will play an informing role in this case.

 

There is a similar situation with permits for alienation of monuments of local importance by their owners. Many buildings in the center of Kyiv are considered to be the monuments of local importance. It is necessary to obtain a permit from a cultural heritage body in order to sell or lease them.

It is important that we talk not about reconstruction, demolition or remodeling, but just about the change of private owners. It is not essential for the state who will be a property owner, the main thing is that a cultural monument is saved. Therefore, there is no sense in this permit.

Instead, the monument owner needs to collect documents, submit them to a competent body, wait for a permit for a month, later conclude a purchase/sale agreement, and then a new owner or tenant will go through bureaucratic procedures to conclude a new protective agreement.

This bureaucratic procedure requires significant time and cost resources. That is why the draft law offers to replace this permit with a declaration and provide an automatic transfer of the rights and duties to a new owner of the cultural monument under the protective agreement.

The reasons to abolish some other permits is harmonizing the legislation in line with other laws that have already improved certain procedures.

 

For example, the operational permits for facilities producing the baby food are canceled due to the introduction of an updated system of operational permits in the law “On general principles and requirements for food safety and quality”, which entered into force on September 20, 2015.

Another example is that the permit to remove the upper layer of soil in a land parcel is now transformed into the process of declaration. The obtaining of this permit was not only extremely bureaucratic and corrupt, but also in contradiction to the law “On the regulation of urban development”.

According to our estimates, adoption of the draft law will annually save for business owners at least 196,762 days of waiting. Cost savings will be even more significant.

We don’t have complete statistics on the costs for permits. The available information gives reasons to believe that the annual burden on business will decrease by 28 million hryvnas of official fees and 193 million hryvnas of unofficial fees.

The source: “Economichna Pravda

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