Experts, authorities: New procedure of shares payment – powerful anti-corruption measure



Kyiv, September 26, 2016. A new procedure of shares payment involves a one-click registration, calculations based on only two coefficients and transparent online accounting – all information can be seen online. This was reported by Olga Balytska, deputy of Kyiv city council, at a debate at Ukraine Crisis Media Center. “The system will operate with one click. This is an ultramodern, completely new system that eliminates any contact with officials. The system has a transparent formula, almost all of the documents can be submitted online, the same is true of shares calculation and conclusion of an agreement,” said Ms. Balytska.


Gennady Plis, First Deputy Head of Kyiv City Council, focused on the advantages of the suggested procedure. The rate has decreased from 10 per cent to 4 per cent for non-residential premises, calculations became simplified and the Budget Commission will not be able to influence the admission of external networks in shares payment. “This is the most problematic abuse-prone area. As of today, the debt is UAH 2 billion. The developer chooses an illegal way to put the facility in operation without paying shares. Until we develop a transparent payment scheme, until it is higher, no one will pay because businesses count their money,” says Mr. Plis. According to him, important innovations include mandatory inspection of all networks that are accepted by an auditing department, accounting of shares and exemption from shares payment only in limited cases in compliance with the law.


Andriy Erashov, EasyBusiness partner, outlined these benefits for citizens. Now citizens will see how the shares payment is made and the new jobs are created, while developers will be in   equal conditions, which will ensure competition and lower prices.


Sergiy Petrov, EasyBusiness Project Manager, expressed hope that the simplified order of shares payment is the first step towards its abolition. But as long as the order persists, an important point is that the influence of the Budget Commission is canceled. “Now there is the tax inspector, who himself sets the tax rate and determines whether you will pay it. The Commission wields considerable power, but the new order will completely cancel its impact. Now, a calculator is the only decisive tool of influence on payments,” emphasized Mr. Petrov.
Vitaliy Gryb, Expert at the Reanimation Package of Reforms, reminded that on September 23, the Budget Commission considered the adoption of the new order. “MPs’ idea was as follows: we want parliamentary control rather than transparency. The Commission clearly showed who wants the new order and who does not. During those two months spent by the Commission to drown this project in empty talk the budget of Kyiv did not receive funds because the developers, waiting for a new project, apparently have stopped these payments,” noted Mr. Gryb.


Oleksandr Kashko, Expert of the Reanimation Package of Reforms, stressed the importance of simplifying the regulatory mechanisms as currently, Ukraine desperately needs investment, and any additional regulation is an additional tax to business.