Business Ombudsman Council receives fewer complaints in third quarter (KyivPost)
Ukraine’s Business Ombudsman Council, the country’s watchdog that monitors state activity in relation to business, has seen a decreasing stream of complaints from companies, the agency’s head, Algirdas Semeta, said during a quarterly report press conference on Nov. 6.
Overall, there were 308 complaints submitted during the third quarter — 25 percent less than the second quarter and 52 percent less than the first quarter, Semeta said.
This trend coincides with Ukraine’s rise in the World Bank’s Ease of Doing Business ranking, where the country climbed 5 spots up to 71st place in the 2019 report.
Value-added tax — or VAT — returns remain a central problem for businesses in Ukraine. But the ombudsman observed fewer complaints about the administration of the tax, which is now done electronically.
State authorities are also putting less pressure on businesses: There have been 27 percent fewer complaints about pressure registered last quarter compared to the previous one. Other oversight authorities, including the police, are also conducting fewer searches of companies without the proper legal grounds. Roughly 10 percent fewer complaints about searches have been submitted.
On the other hand, the ombudsman noted that his office received 25 percent more complaints about Ukraine’s customs officials, 25 percent more complaints against the State Enforcement Service (which enforces court decisions), and 75 percent more complaints about state-owned enterprises abusing their state powers.
Semeta also announced an all-time low of 50 complaints by foreign investors during the last two years, although he said it is too early to draw clear conclusions about this.
The authorities, as a rule, respond positively to ombudsman’s recommendations and initiatives. The Ministry of Justice and the State Fiscal Service lead the way by implementing 95 percent of the agency’s recommendations.
Meanwhile, the General Prosecutor’s Office, the Presidential Administration, and prime minister lag behind, completing only about 80 percent of recommendations. Overall, there has been a 19 percent improvement in state bodies’ implementation of recommendations when compared to the previous quarter.
The third quarter report concentrates on problems faced by small and medium businesses, or SMEs, in Ukraine. One of today’s biggest challenges for SMEs is receiving VAT refunds, whereas large corporations suffer the most from tax audits initiated by the State Fiscal Service.
Semeta also said that Ukraine needs to pass the law on the Business Ombudsman’s Council. The new law would give more authority to BOC to hold administrative bodies responsible and allow the agency access to classified documents. Moreover, the law would protect the BOC from criminal cases that currently can be easily filed against it. It would also force the state authorities to give well-substantiated answers for turning down BOC initiatives.
The draft law has been submitted to the Verkhovna Rada, but there is not enough political will for it to pass. Ukrainian President Petro Poroshenko and international organizations like the European Bank for Reconstruction and Development, U.S.-Ukraine Business Council, and the Organization for Economic Cooperation and Development all back the bill.
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