The wrong kind of restoration key painful problems for the Ukrainian business

The Business Ombudsman Council (BOC) is sharpening its work focus and continues to advocate for legality in the relationship of entrepreneurs with the state. It is proved by a gradual growth of business complaints to the institution. Meanwhile, the Council attributes such a trend to entrepreneurial activities revitalization, on the one hand, and state bodies’ efforts to impose one’s will on the other.

During April-June 2023, BOC received 361 complaints about state bodies’ malpractice and closed 182 cases. As of the end of July, investigation of 153 cases continues. An important indicator assessing the institution’s performance, is the financial effect amount that the Council helps business return.  In the second quarter the financial effect made up UAH 105 mn. Since launch of operations, BOC managed to save UAH 25 bn. for companies.

The most common category of business complaints in the reporting quarter was tax issues. Already four quarters in a row, regardless the ongoing full-scale war, their number is 70% of total appeals to the institution. Given partial implementation of recommendations issued by BOC to the Ministry of Finance and the STS of Ukraine based on our own initiative investigation results, the number of cases on tax invoices suspension somewhat decreased (from 34% in Q1 2023 to 21% in Q2 2023). The Business Ombudsman noted a positive introduction of the administrative decisions appeal procedure from July 2023 on risky payers and tax data tables unacceptance that was one of the main recommendations for improving the SMKOR. Alongside this, with BOC assistance and cooperation with stakeholders it finally became possible to apply tax benefits for entrepreneurs in temporarily occupied/de-occupied territories and domestic UAV manufacturers.

The second common category of complaints concerned state bodies’ malpractice – 9% of complaints. Entrepreneurs reported on procedural abuses and inactivity of the National Police, as well as the Prosecutor’s Office. The Business Ombudsman highlights state representatives continue using criminal proceedings as a tool of pressure on business, throwing Ukraine back further to past decades and hinders not only free economy development, but also recovery processes.

“Despite all legislative reforms in the past years, investigators and prosecutors are still soviet-minded: the state, everyone owes to for the former, and the shadow of “general oversight of legality” for the latter. As long as such approaches are rewarded hierarchically (both formally and informally), it is exactly they rather than Europeanized laws will determine a behavior pattern”Roman Waschuk, Business Ombudsman.

BOC boosts interaction with all the stakeholders involved in European integration of Ukraine processes and its future reconstruction from consequences of the full-scale aggression of russian federation. The Business Ombudsman and his Deputy participated in this year’s Ukraine Recovery Conference in London and offered help to protect reconstruction process participants’ rights before the state. This direction also concerns cooperation of BOC with the Restoration Agency of Ukraine, which is gradually gaining momentum. The Council is ready to take up business complaints about violations related to first infrastructure reconstruction projects implementation right away.

In the reporting quarters BOC cooperation with the Entrepreneurship and Export Promotion Office and Diia.Business national project got boosted. Apart from the information page that the Council has on Diia.Business portal, joint webinars and business support events with the beginning of a new business season are planned.

For already eight years BOC has been developing with Ukrainian business side by side, as well as improving its toolkit. The Council has appropriate experience in mediation between business and the state and developed effective interaction mechanisms with state bodies through the years. It enables to achieve tangible results in solving entrepreneurs’ problems. In view of an inevitably soon victory of Ukraine over russian aggressor, the Council is ready to continue its mission in protecting business rights and offers a reliable shoulder for entrepreneurs to lean on in case of possible abuses by state bodies.
You can make a complaint to BOC through the form on the website at: https://boi.org.ua/complaint/online. You can also send a question regarding the Council’s work or complaint consideration via Telegram chat at: +380 (99) 237 37 37.

You can read the quarterly report here. 

Next news: Meeting of Restoration Agency and Business Ombudsman Council with EBA member companies