During October-December 2023, the Business Ombudsman Council (BOC) received 337 complaints from companies about malpractice of state bodies and closed 220 cases. The investigation of 101 cases is ongoing as of the beginning of January 2024. In the final quarter of the year, the Council helped businesses return UAH 163 mn. Since launch of operations, the Council’s financial effect has exceeded UAH 25 bn.
Business tax issues lead the rating of complaints to the Council, accounting for 61% of total appeals. Although the total number of appeals on tax issues showed a slight increase compared to the last quarter (206 out of 337 in Q4 vs 176 out of 310 in Q3), according to the Business Ombudsman, business problems in the tax field remain at a rather alarming level, as well as SMKOR system fixing itself. The expected amendments to the regulatory framework were mostly of a formal and technical nature and did not bring significant positive changes. So, tax invoices suspension (which 20% of active payers encountered as of December 2023), non-execution of court decisions on tax invoices registration, and in addition, tax audits are among the main subjects of business complaints. The Council continues monitoring the implementation of recommendations regarding changes in the VAT system by state bodies and started a new own-initiative investigation on tax inspections at the beginning of 2024.
Apart from tax issues, the Council also notes companies’ problems in relations with law enforcement bodies. We are talking about cases of property seizure as a result of selective searches and procedural abuses of law enforcement bodies. There was a response of the Business Ombudsman to the high-profile case of Concord Capital, which fell on the first quarter of 2024 already. In order to resume a dialogue of business with the Prosecutor General’s Office, the Council provided its platform for regular meetings of the PGO and business associations.
“In Ukraine, a law-abiding business is a target for meticulous inspections and punishments of fiscal or law enforcement bodies for formal mistakes. We can clearly see that most of the problems of Ukrainian companies lie in incorrect public governance. Only structural changes in the state’s approach to treating business will be able to restore trust in relations with entrepreneurs and encourage investors to join the reconstruction process“, believes Business Ombudsman Roman Waschuk.
A significant breakthrough of the reporting quarter was entry into force of the law on the administrative procedure, the adoption of which the institution had been promoting for many years. That is why the law on the administrative procedure with its novelties making it simpler for business to challenge actions or inactivity of state bodies became a quarterly report focus (see pp. 15-17 of the report).
The Business Ombudsman Council is not limited to considering business complaints, but also continues working side by side with the Government of Ukraine, the Ministry of Reconstruction and the Restoration Agency for transparent involvement of the private sector in reconstruction and business rights protection before the state in the reconstruction process.
The Council encourages businesses to speak up on cases of state bodies’ abuse and to take the advantage of the opportunity to solve problematic issues free of charge and at the pre-trial stage thanks to the Business Ombudsman’s assistance.
Download the report here.
