Financial Impact of Business Ombudsman Council in Quarter II Reaches UAH 529 mln

The Business Ombudsman Council (BOC) in Ukraine published a report with Second Quarter results for 2016, summing up its activities in defense of Ukrainian business interests. Over this reporting period, the BOC received 213 complaints (twice as bid as in the previous quarter) and successfully closed 146 cases, which is the best result for any quarter so far. The financial impact of these successes represented UAH 529 mln for this quarter. Direct financial impact of organization employing just 15 employees amounted to UAH 3.5 bln.
The largest number of complaints came from small and medium-sized businesses (78%) coming predominantly from manufacturers, wholesalers, agribusiness, and business services. Most active complainants were in the City of Kyiv (95), as well as in Kyiv (21), Kharkiv (11), Odesa (11) and Dnipropetrovsk (9) regions. There were no complaints from Chernigiv and Crimea.
Interactions between business entities and fiscal agencies remain the most troublesome area. These include tax inspections, VAT electronic administration, dilatory VAT refund, as well as criminal proceedings initiated by the State Fiscal Service of Ukraine against business. The challenges that businesses face with local government agencies also remain acute. The range of questionable decisions made by these agencies includes issues revolving around land, the regulation of SMEs in the regions. Interactions with law enforcement agencies, such as excess of power during investigations and initiating criminal proceedings against business, remain the laggard in this regard. Among the positive trends are the decrease of complaints regarding registration of business and property rights. This can be explained by successful implementation of registration services reform. There was a decrease of complaints regarding obtaining permits and licenses.
The State Fiscal Service of Ukraine (including the State Tax Inspection, and the Customs Service), as well as enforcement agencies (including Prosecutor’s Office, National Police, State Security Service and Ministry of Internal Affairs of Ukraine) remained the leader of the BOC’s anti-chart. In this quarter, the number of complaints against local councils and municipalities grew significantly. The new objects of complaints appeared in the anti-ranking, such as: Ministry of Regional Development of Ukraine, National Police of Ukraine, Ministry of Social Policy and Labour of Ukraine. However, that the BOC’s dialogue with government agencies is rather productive: the rate of implementing BOC’s recommendations increased from 64% in the previous quarter to 70% in the current reporting quarter.
For transparency of interactions during investigations and preparation of recommendations, the BOC signed Memorandum of cooperation and partnership with the Ministry of Ecology and Natural Resources. It is the fifth document on cooperation with government agencies in the course of the first year of BOC’s operations.
The BOC’s experts prepared a new set of systemic recommendations for the Government of Ukraine on attracting investment to the construction industry. The report offers recommendations to fight overregulation, red tape, getting permits for carrying out construction projects that widespread corrupt practices and do little to encourage investment into the economy.
“Our team is closing more and more investigations with each coming quarter with significant financial results for complainants. In the second quarter alone, we have managed to save over UAH 500 mln for businesses. Remarkably, the percentage of dismissed complaints has dropped twice compared to the previous year – awareness about our services is growing. We will continue to work tirelessly for much needed transformation to become inevitable”, notes Algirdas Semeta, Business Ombudsman.
You can find QReports in English and Ukrainian here: https://boi.org.ua/en/reports/