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State pressure on business: Is there a chance to survive

In the time of crisis, which Ukraine is experiencing now, business demonstrates a valuable ability – to adapt to difficult conditions, to optimize its processes in order to stay afloat. Even in spite of the fact that in 2015, in the World Bank’s ranking on ease of doing business, Ukraine took 96th place, rising by 16 points, Ukrainian entrepreneurs did not feel relaxed. Considering the current economic situation, business needs to be liberalized and the conditions for working in the market will be lightened. About whether the pressure on companies from the state has changed over the past year.

What complains business
According to a survey conducted by the Internet e-commerce center, among small and medium-sized businesses, 75% of businessmen said that they continue to feel heightened interest from government agencies, including supervisors. A quarter of companies believe that the pressure has decreased.

Half of the companies believe that over the past year there have been no qualitative changes towards liberalization of relations between SME companies and the state. And 42% of respondents, on the contrary, claim that pressure from the inspection structures is increasing.

It is estimated that 60% of companies check their state activity has not increased since last year. Although 8% believe that the number of checks has increased. Perhaps the case in the economic sector and the industry in which companies operate. At the same time, a quarter of companies noted that they have become less inspected.

As noted by the company, the amount of reporting that is required to submit to the state, remained at the same level. So read 72% of entrepreneurs surveyed. And only 14% of companies claim that reporting has decreased.

It can be concluded that over the past year the relationship between entrepreneurs and the state has not become easier. According to the companies, they still feel pressure from the regulatory authorities on their business, and the number of reports has not decreased.

In addition, businessmen note the tax pressure, the introduction of additional import duties and the difficult situation in the east of the country.

At the same time, according to a study of the European Business Association – Investment Attractiveness Index in the 1st quarter of 2015, the main positive thing is that business notes active steps towards deregulation and simplification of business procedures. Most of all, these attempts have been felt by the agrarian business. It is about abolishing the need to obtain a quarantine certificate. Reduction in terms of phytosanitary certificate granting, cancellation of 6 licenses and 14 permits in the field of agricultural regulation.

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Despite the change of top management in the ministries, the “old guard” still remains on the ground, which, it seems, sometimes simply sabotage all the decisions of the leadership due to the frank failure to fulfill their functions.

According to Taras Kachka, Vice President for Strategic Development of the American Chamber of Commerce in Ukraine, the conditions for doing business have been liberalized in Ukraine.

“According to the business, which represents the American Chamber of Commerce in Ukraine, the government has achieved the greatest success in matters of deregulation. The business community is seeing tangible progress in the elimination or simplification of permitting procedures in agriculture, energy, health care. For example, the Law No. 1193, which canceled a number of unnecessary permitting documents in agriculture, “he stressed.

It’s good that the state has learned not to replace unnecessary rules with others, but to completely abolish them
Not so long ago, in the first reading, Draft Law No. 2655 was approved concerning the reduction of administrative pressure, or, as it is called in the business environment, the Draft Law “On Further Deregulation of Agriculture”.

Also, the expert added, the business positively perceived the adoption of the Law on the Simplification of Business Conditions, and the Resolution of the Cabinet of Ministers of Ukraine adopted at the beginning of the year. It is good that the state has learned not to replace the unnecessary rules with others, but to completely abolish them.

“Business notes the government’s desire to simplify business management, which is confirmed by a number of specific deregulation initiatives. Nevertheless, it will be possible to give a definite positive assessment when the daily practice of doing business with regulatory bodies changes.

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