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The Business Ombudsman receives a record  number of complaints concerning state bodies 

30.07.2021

In April-June 2021, the Business Ombudsman Council received 531 complaints on malpractice of state bodies, which is 25% more against Q1 2021 and 38% more against Q2 2020. The institution completed the investigation of 287 cases and helped businesses return and save UAH 94 mn. 102 out of 104 applicants (98%) who filled out the feedback form were satisfied with cooperation with the BOC.

Four subjects of complaints accounted for 85% of business complaints for the quarter:

  • Tax issues. Two-thirds (65%) of business complaints were tax-related, non-enforcement of court decisions on tax invoices registration (115 complaints), tax invoices suspension (71), challenging tax audit findings (46), inclusion of taxpayers in “risky” lists (41), tax criminal cases (20). As compared to Q1 2021, entrepreneurs complained more about blocking of tax invoices (+58%), inclusion in “risky” taxpayers lists (+ 58%) and unreasonably opened tax criminal cases (20). The number of complaints about non-enforcement of court decisions on registration of tax invoices increased (+102%).

‘In the second quarter, we received a record-breaking number of appeals in the last three years. Complaints about non-enforcement of court decisions on tax invoices registration became a key driver for this growth. Earlier, in two BOC systemic reports we developed recommendations on how to improve the situation with execution of decisions that had entered into force and addressed them to the State Tax Service, the Ministry of Finance and the Cabinet of Ministers. I believe such a trend should attract the attention of state bodies and encourage them to implement the BOC recommendations as soon as possible’, Marcin Święcicki, the Business Ombudsman pointed out.

  • Complaints on actions of law enforcement bodies. Entrepreneurs complained about procedural violations and inaction of the National Police (32), the Prosecutor's Office (16) and the State Security Service of Ukraine (9). The number of entrepreneurs’ complaints against violations of the National Police and the Prosecutor's Office decreased slightly compared to Q1 2021, but increased compared to Q2 2020. Entrepreneurs complained more about the SSS both in Q1 2021 (+13%), and Q2 2020 (+29%).
  • Complaints on actions of state regulators. The total number of complaints about actions of state regulators increased (+ 44%) compared to Q2 2020. Meanwhile, the number of complaints about malpractice of state regulators decreased significantly as compared to Q12021 (+32%). In particular, the number of complaints about actions of the DABI, which has been reforming for over a year, has decreased threefold.
  • Complaints on actions of local government authorities. The number of appeals on local government authorities increased significantly: it doubled against Q1 2021 and almost tripled against Q2 2020. In particular, malpractice episodes related to issuance of permits and allocation of land plots, which is the area of responsibility of local government authorities.

State bodies implemented 88% of the BOC individual recommendations. Among systemic recommendations issued since launch of the BOC operations, the following were implemented in the reporting quarter:

  • The Verkhovna Rada adopted amendments to the Land Code aimed at resolving territorial disputes between local governments;
  • The Antimonopoly Committee and the National Commission for State Regulation of Energy and Public Utilities intensified cooperation under the Memorandum for natural monopolists to improve service consumers complaints handling as recommended by the BOC.

A new step to the development of the Draft Law “On the Business Ombudsman Institution in Ukraine” was made. The updated version of the document taking into account remarks of some deputies and lawyers, received support of the Verkhovna Rada Committee on Economic Development and is pending consideration at the plenary session. The EU ambassadors and 13 donor countries signed a collective letter in support of the Draft Law to the Speaker of the Verkhovna Rada Dmytro Razumkov.

The Q2 2021 report is available here