Kyiv, November 9, 2015. Ukraine can improve its position in the Doing Business ranking only if different branches of the authorities interact with each other. They have to focus not only on improving administrative procedures, but also on structural changes, according to the participants of the round table discussion “Strategy to improve Ukraine’s position in Doing Business rating and tactics of its implementation”, held at Ukraine Crisis Media Center within the Ukrainian Reforms Media Center project.
The Doing Business rating is a global study, carried out annually by the World Bank and determines the ease of doing business internationally. In the latest Doing Business ranking Ukraine took 83rd place, 4 positions higher than in 2014. The main reform in which Ukraine improved its rating was facilitating the registration of property and businesses.
Natalia Sevastyanova, First Deputy Minister of Justice of Ukraine, said that the introduction of online services saving entrepreneurs from the need to directly interact with officials was a priority for the ministry. “We had to fight with state authorities so that they began to take printed documents without holograms. Now we eliminated this problem: everyone is getting used to the fact that the document may be valid without a “wet” (original) seal and signature, hologram,” said Sevastyanova.
Sevastyanova informed that the Ministry of Justice, as part of decentralization reform, is ready to transfer the function of registering businesses and property to local governments. The corresponding draft law has been adopted in the first reading, finalized and agreed by all parliamentary factions. Now everyone expects rapid adoption. “What does it mean? In addition to local governments, 7,000 notaries receive the right to register businesses. This will create competition and fight corruption. Notaries as a community have a good reputation: we only have 2 or 3 disciplinary proceedings a year,” noted Sevastyanova.
While acknowledging the efforts of the Ministry of Justice to simplify business registration procedures, Ksenia Lyapina, Head of the State Regulatory Service, noted the almost complete lack of progress in business liquidations and executive proceedings. “In corrupted areas we feel great resistance to change. This applies primarily to executive proceedings, where there is an attempt to create a private alternative to existing services. In general, we make progress in the areas where it is easy to move, and almost none in those where it is difficult. Therefore, our task is to promote these difficult areas. In this context it is important to shape public opinion, which would press on the political forces and thus drive changes,” says Lyapina.
Olena Makeyeva, Deputy Minister of Finance of Ukraine, admitted that traditionally businesses complain a lot about tax administration. Restoring order in this area will improve the business environment, and Ukraine’s position in the Doing Business ranking. She reported that the Finance Ministry plans to take a number of steps to do so. In particular, the Ministry will simplify accounting and improve performance of electronic services. “Providing electronic services is the duty of the state. We dream of a fully functioning “electronic taxpayer’s office” and electronic reporting service. We all want to work quickly and facilitate use. The main problem now is that developing and installing software needs money. Unfortunately, we have no free resources for the purpose. Therefore we are looking for donors who could partially fund these electronic services of the State Fiscal Service,” said Makeyeva. According to her, none of the countries with efficient tax models have completely solved the problem of corruption only due to legal regulations. “Much depends on the way a tax inspector communicates with taxpayers. That is why we have to introduce a code of ethics for Fiscal Service employees. But for this to work, new young people should appear in the Fiscal Service and they have to share such values. First, we need to reform the civil service, civil servants must have decent salaries, and young people should have a desire to work in supervisory bodies,” says Makeyeva.
Tetiana Palamarchuk, Expert of the Easy Business public organization, pointed out the need to improve cooperation between various authorities. The expert outlined a number of areas in which all the parties concerned should concentrate efforts to facilitate business conditions in Ukraine. In particular, she referred to extension of creditors’ rights and solving the problem of entrepreneurs’ insolvency. “We propose to introduce real-time access for creditors to information on debtors. In our view, this is consistent with international practice. We propose to begin a discussion to ultimately prepare a joint bill,” said the expert. Also the proposed changes include altering approaches to determining customs rates.
Oleksiy Honcharuk, Head of the Better Regulation Delivery Office under the Ministry of Economic Development and Trade of Ukraine, informed that soon they will develop and present a “road map of reforms” designed to improve Ukraine’s position in the ranking of Doing Business. However, Honcharuk considers it necessary to improve communication with the public, which, in his opinion, is not aware of the changes taking place in the area of deregulation. Honcharuk gave the example of using original seals for various documents. “For example, today Ukraine has de jure abolished the necessity of original seals but the Doing Business rating does not take it into account. Why? For when the World Bank conducted the survey among entrepreneurs, they said that without seals they cannot carry out business in Ukraine. But this is not the existing practice anymore. So in addition to reforms we must also establish communication,” said Honcharuk.
The roundtable was also attended by:
Natalia Katser-Buchkovska, People’s Deputy of Ukraine
Andriy Yerashov, Expert of the Easy Business public organization
Serhiy Petrov, Expert of the Easy Business public organization