Without duties and penalties: changes for business after cancelled decrees by Zelenskyi

10-07-2019

Volodymyr Zelenskyi cancelled more than 160 decrees. From now on, life will become easier for businesses. This list includes two decrees, which were among the 10 most important requirements awaited by the business community for almost two years. This is primarily about the decree that had existed since the 1990s and provided for a minimum amount of state duty for notarization of real estate purchase and sale transactions – 1% of its value. In that case, the notaries could compete for large contracts with the public sector, because they could make a fortune even with one transaction. For example, a notary who certified the documents during the privatization of Kryvorizhstal in 2004 earned 250 million hryvnias.

This duty was not only expensive for the state. It created the basis for corruption in this area. First of all, there was no procedure on how to choose a notary for your case. Most often, a notary was chosen by a seller, so the State Property Fund should decide whom to pay 250 million hryvnias for services. Until now, the business had similar problems: if all the notaries provide their service for the same price, a big company could arrange for ‘special treatment’ with one of them. For example, it may include the condition that part of the duty will be paid back to the entrepreneur somehow. The president’s decision will save up to a billion hryvnias on the price difference, and the real estate cost can be reduced.

Another important initiative is the abolition of a decree on cash discipline, because it has been required just in the early 90’s. In the Soviet Union, the number of private cash registers was significantly lower than in modern Ukraine, and therefore, on June 12, 1995, the president signed a decree imposing fines for violating the cash circulation regulation rules. Entrepreneurs was obliged to report on time when the money was received, how they were included to the cash balance, registered in documents and how the costs were settled. Heavy fines for a several hours delay in calculating funds are now cancelled.

At present, in Ukrainian courts, there are about a thousand pending cases, the total amount of fines of which is 10 billion hryvnias. Currently, there is no need for such strict regulation, and we don’t have to be afraid of chaos without this decree, because there is another liability – the administrative one. It implies that officials and entrepreneurs can also be convicted, but not later than 3 months from the violation date. Previously, a tax officer could open a 2-year-old violation case on delaying in cash withdrawals on account for one day.

A decree on school uniform, which had to be made only from Ukrainian fabrics until now, was cancelled as well. The decree stated that the Cabinet of Ministers should introduce the selection and approval of school uniforms, providing for its options for students of all ages. Now it sounds like an absurdity and makes no sense.

A number of outdated rules was also cancelled in the agricultural sector. For example, in regard to the outdated price regulation.

Why did the president resolve such issues? 

After the collapse of the Soviet Union, the Ukrainian economy needed additional standards. For example, there were no private notaries in the state until 1990, so it was necessary to resolve this situation and provide them with some earnings. When the new Constitution went into effect, the president was entitled to approve decrees helping to quickly resolve urgent issues for three years. For this purpose, decrees should be approved by the Cabinet of Ministers and signed by the Prime Minister of Ukraine. At the same time, the president had to submit a similar draft decree for consideration by the Verkhovna Rada. If people’s deputies didn’t approve or cancel a draft law within 30 days, a decree should enter into effect. It was supposed that it would act temporarily, but in practice, it had almost an endless effect.

Volodymyr Zelenskyi, like his predecessor, can make such decisions no longer. Ukraine has a market economy, and therefore the president can not, for example, approve salaries for lawyers or notaries again.

What else should be changed for businesses in Ukraine?

For example, there is no quality Internet outside the Ukrainian cities. The fact is that in Ukraine, 3G and 4G technologies were introduced at high bands (about 2000 MHz), and the current communications – at 900 MHz. The higher the band, the smaller area it covers. It’s not just about the village areas, but even about some parts of the city.

This can be changed if we, first of all, introduce a principle of technological neutrality. Frequencies are like roads. They can be used with different technologies, so there is no reason to allocate special bands for 3G and 4G. In addition, it is necessary to allow operators to switch frequencies. Due to the fact that frequencies are assigned to certain users, they can not be leased or shared, although this would help entrepreneurs avoid holes in their coverage and provide quality Internet access everywhere.

Raider attacks are among other pressing business issues. In this case, the Presidential Administration itself can take the lead, but it is impossible to technically change something without cooperation with the Ministry of Justice. It is also needed to approve a package of changes that will establish a transparent subsoil resource allocation process. Historically, gas, oil and other minerals were being allocated without going through auction procedures. Accordingly, the Ukrainians were losing their subsoil resources for peanuts. They were given to people who had an influence on their allocation. Therefore, now it is important to launch a transparent system to register these subsoil resources, in order to understand what their status is and who receives them as well as develop our own extraction more actively.

Electronic registration is also required for wood. Entrepreneurs cut down forests against Ukrainian interests and violate the law. Such a registration is required to make this business official and regulate it properly. All such documents and projects have been developed for two years, but they were previously blocked by the Cabinet of Ministers.

It is important to make the information of the state land cadastre public: its data are inaccurate and complicated, and nobody understands who actually owns this or that land plot. Public cadastres would help with the analysis and security of their owners. This is critically necessary for opening the land market. So the start is good, but we are waiting for next steps.

Source: Hromadske

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