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Stay afloat. How One Destroys Small Business in Ukraine

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Tax innovations, which are detrimental to small businesses, is a mediocre attempt of the Ministry of Social Policy Of Ukraine to fill the Pension Fund and a desperate desire to keep the tools of pressure on businesses, CASE Ukraine`s Senior Economist Volodymyr Dubrovsky said in an article for the ‘Focus’ magazine.

‘It sounds strange, but last year we achieved a significant progress toward tax reform. If all goes well, a small business, which uses a common taxation system and pays VAT, should experience a great administrative simplification. Those businessmen, exporting goods, to experience less problems in the field of VAT refund. Now the replacement of the de facto liquidated tax police by the financial police is considered. The last will be deprived of law enforcement power as well as of the opportunity to eliminate someone`s unwanted businesses and to wheedle money at threat of criminal cases launching.

Unfortunately, by the New Year some ‘comrades’ were able to push through the Verkhovna Rada some legislation changes, which affect small business in a negative way. First of all, it is a grapple with shadow wages and minimum wage increase. As far as I am concerned, it is an initiative of the Ministry of Social Policy of Ukraine, which was strongly supported by the Tax Office.

The fact that the local governments of the State Fiscal Service of Ukraine (SFSU) were deprived of control functions. Their bases were transferred to the Ministry of Finance. In addition to that, Tax Office will no longer own its own police. Accordingly, SFSU moved to the offensive: it tries to show its importance and create a new field for the endless inspections and corruption.

 

January 31, 2017