Nara Chandrababu Naidu's Visionary Policies For Andhra Pradesh's Development
Presentation Restoring Donbas and Ukraine
1. RESTORING DONBAS AND UKRAINE
How to work the way up from military conict to a peaceful
life and a new level of economy in the region and in the country
November, 2014
2.
3. RESTORING DONBAS AND UKRAINE
How to work the way up from military conict to a peaceful
life and a new level of economy in the region and in the country
24. Ukraine is currently going through one of the worst tragedies in its history. Every day the war brings us new losses. People are dying. Civilians are living in awful
conditions. No water, electricity, health care. Many of them were left without shelter and means of living.
The war has also provoked a severe economic crisis in Ukraine. The country has lost one Šfth of its share in levels of international trade. Foreign debt is three-quarters
of GDP. Every mistake in the reforms can trigger a domino e‹ect. Then the whole sectors of economy will perish. Investors are massively leaving the country. Long
money do not like uncertainty.
The end of the military conŒict is undoubtedly desired and awaited by every one. But it will not solve all the problems. When peace comes, Ukraine will face a new
challenge - restoration of the destroyed Donbas.
This region can become either a depressive ghetto or a driver to the development of the whole Ukraine. Today my colleagues and I are thinking only about how to
make the second option a reality. And we can see necessary solutions.
We think, that direct governmental subsidies to the a‹ected region are not an e‹ective way. Because Ukraine has too little money, but too much corruption.
We want to say: Donbas needs opportunities more than money. Donbas will be saved by free entrepreneurial initiative. The main task of the Government is to create
appropriate conditions for them. There are lots of mechanisms - from tax holidays to the very simpliŠed procedure of business registration and cancellation of
war-time penalties. Minor taxes and little bureaucracy, but a lot of opportunities. It will be interesting to business. Only business activity will bring back life into
Donbas cities. Then, enterprising people will restore the ruined on their own cities. There are many patriots and a lot of heartwarming people in Donbas! I am sure,
these people are patriots of their native land, and once again they will prefer to develop their business there.
Why we, my colleagues and I, are dealing with this issue? Because we feel as if every projectile in this war is Œying at every one of us. Because the war destroys all that
is dear to us and that we love and have known since childhood. It destroys everything, what the leadership and the people of the region have been building and
trying to multiply for Donbas for decades.
We cannot stare blankly at the ongoing tragedy. Therefore, all our knowledge, strength and love for our country, we are ready to o‹er in the best interest of Donbas
and Ukraine. And we are grateful in advance to all who will join us and support us.
Yours faithfully,
Oleksandr Klymenko
25. 3 :
CONFLICT IN DONBAS: PRICE OF WAR
On April 7, 2014 the anti-terrorist operation
(ATO) was launched in the East of Ukraine -
Donetsk and Luhansk regions. Instead of
the pre-announced 48 hours for its
implementation, ATO has been held for 7
months already, causing thousands of
deaths and destruction to the region. What
is the true price of this war for the region?
7 2014
(‰‚Ž)
– „
36.
Over 4035 people have died
(not less than 27 children) and over 9336
people were injured (about 38 children)
(according to UN as of October, 29)
The number of forced migrants from
Donbas exceeded 1 million people,
with only 262 thousands resettling
within Ukraine
Over 5 million people still remain
in the area of combat operations
38. ‚
-ƒ
17
2014
298 passengers of the airplane
Boeing 777 of Malaysia Airlines have
died; The plane was performing a
planned ight from Amsterdam to
Kuala Lumpur and was shot down on
July 17, 2014 in the east of Donetsk
region in the area of armed conict
46.
60 127
About 620 gas pipelines and 300 gas distribution stations
are damaged. Over a thousand power lines and more than
4 thousand transformer substations are damaged.
From 60 to 127 settlements in Donbas are still without
electricity supply
†
49.
€
ƒ
Because of destruction of 200 schools and lack of elementary
safety, the educational process in schools and universities of
Donetsk and Luhansk regions has actually been thwarted
†
54. The degree of damage to residential properties in the cities
of the ATO area, is ranging from 5 to 60%. For example,
in Kramatorsk, – it is 12%, and in case of Nikolayevka,
Avdeyevka, Seleznevka in the Donetsk region it reaches 60%
Because of the infrastructure damages,
water supply of Donetsk and Luhansk was
discontinued for more than one month.
Today water is supplied intermittently
Not less than 20 hospitals in Donbas are not
operating, another 17 are either destroyed or
severely damaged. In Luhansk, there is a high
risk of outbreak of infectious diseases
66. :
During 7 months of war in the region more than 20 thousand enterprises in
the eastern regions had been shut down, which is 70% of their total number.
Chronicle of enterprises’ shutdown:
18 ‚‡‰„…‚ 18 ‚‡‰„…‚ 18 ‚‡‰„…‚ 29 ‚‡‰„…‚
2700 3500
Khartsyzsk
pipe plant
”
67. MAY, 8 JUNE, 1 JULY, 24 AUGUST, 18 AUGUST, 18
AUGUST, 18 AUGUST, 18 AUGUST, 18 AUGUST, 27 AUGUST, 29
4000
Avdeevsky
coke and
chemical plant
‰
82. 1 Š‚ˆ
24 out of 95 state-owned mines are currently operating
9 mines are drowned and beyond repair
Coal mining has been stopped at promising mines
Sverdlovantratsit, Rovenkianthracite, Oktiabr’skii rudnik
Work of the whole colliery groups: LisichanskUgol,
Luganskugol, DUEK, Makeevugol has been stopped
Over 70 000 miners were thrown idle
Because of combat actions in Donbas Ukraine has lost 30 million
tons in annual capacity. For the “rst time in its history Ukraine is
forced to buy 1 million tons of coal from the Republic of South Africa
84. 30
More than 30 thousand people have lost their jobs in
Luhansk region, as the result of combat actions
„
85. , ,
100
’ ,
200
Not less than 100 thousand people, according to
preliminary estimates, have lost their jobs in Donetsk
region, as the result of combat actions
If this trend persists, up to 200 thousand people
more will lose their jobs by the end of the year
8
30 000
100 000
200 000
88. War in Donbas means a strike on the economy of the
whole Ukraine
16 .
( € )
Direct revenue losses of Ukrainian budget at year-end
can be UAH 16 billion (according to the
Ministry of Finance of Ukraine)
ƒ- „
90. 4,4 ..
Due to the mass closure of businesses in Donetsk and
Luhansk regions, budget losses on tax payments
amounted to more than UAH 4,4 billion
,
7 9%,
€ 17 22%
According to forecast, the drop of Ukrainian GDP
at year-end can constitute 7 to 9%,
inŒation will constitute 17 to 22%
—,
91.
According to IMF forecasts, later on Ukraine could
face a deep recession and a sharp drop in GDP awaits
16
‰ˆ
16
billion
UAH
4,4
‰ˆ
4,4
billion
UAH
‡‡
-7 -9%
†
17-22%
GDP
-7 to -9%
Ination
17-22%
GDP
93. 11
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
The team, uniting
economic experts,
experienced state
managers, entrepreneurs
of Donbas, who know Šrsthand about the
peculiarities and problems of the region,
has developed a step by step plan for the
restoration of Donbas. We believe that the
Šrst priority steps should be Šnding a
political solution for establishment of
peace in the region. However, even now it
is necessary to think not only about how to
restore the region's industry and
infrastructure, but also how to build a
NEW DONBAS, which will be able to
become a driver for the development of
the WHOLE UKRAINE!
,
,
, -
98. 12
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
…-7 ”‚‰‡ ‚‡„…ˆ• ‡Œ ‚„„ TOP-7 STEPS TOWARDS THE NEW DONBAS
Œ
Peaceful Donbas
Normalization of region life
Determination of the region
status
Investments in Donbas
Small and medium businesses as the
backbone of Donbas economy
Donbas as an economic hub between
the East and the West
Overcoming the humanitarian catastrophe
103. 13
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
Œ†ˆ—˜ ‚„„ PEACEFUL DONBAS
Cessation of Šre
and Šnding a political
solution in the course
of negotiations.
Establishment of an
international commission
under the auspices of the UN
to oversee the observance
of truce in the region.
.
106. 14
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
ˆŒ‚ƒ†™‚š†‹ ›†™† ˆ•‰†‚ NORMALIZATION OF LIFE IN THE REGION
Establishment of an Advisory Group
(Ukraine-Russia-EU-USA) to solve
the current problems in the region:
provision of humanitarian corridors,
restoration of urban water supply,
carrying out the full-scale heating
season, ensuring operation of
industrial facilities.
112.
Economic autonomy of the region
Rights of Russian speaking citizens
,
€
„,
113. :
Conduct of local elections, a search for a compromise
of the conŒict resolution with the involvement
of the Donbas population, which will necessarily
include:
Creation of a political institute to protect the
regional interests, with no impact on
foreign policy and security of Ukraine
1
2
3
114. 16
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. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
†‡•„…†š†† ‡ ‚„„ INVESTMENTS IN DONBAS
‡ , ‡
123. ,
It is necessary not only to restore, but to build New Successful Donbas.
A complete modernization of production, including introduction of
energy-saving and environmentally friendly technologies, must become an
integral part of the region's recovery. Restoration of industry of Donbas,
together with rising of living standards, – are a prerequisite for reducing social
and political tension.
„
128. -
Creation of a special international fund of donors,
involving the United States, EU, Russian Federation
for the restoration of industry and infrastructure
of Donbas
Implementation of mechanism of a
concessionary agreement with investors
for modernization of the infrastructure:
airports, railways, housing and utilities
infrastructure and other infrastructure
facilities, as well as public transport systems,
healthcare facilities, educational, cultural
and sports facilities
Establishment of a mechanism of tax compensations
to business, involved in the restoration of Donbas,
reduction of customs duties for the goods,
intended for modernization of the region's
infrastructure
129. 17
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
Œ‚ƒ—˜ † „ˆ•†˜ †™•„ – „‡‚
‡˜ ŽŒ†† ‚„„‚
SMALL AND MEDIUM BUSINESSES
AS THE BACKBONE OF DONBAS ECONOMY
„ : For reference:
„
( )
The share of small and medium
businesses in the regional economy
(pre-war data)
… „ ,
.
,
133. .
Economy of Donbas does not need a face lift, but structural changes.
We are Šrmly convinced the main stake in the development
of the region should be placed on small and medium businesses,
on private initiative and on formation of the middle class.
This is important not only in terms of economic transformations,
but also in terms of achieving social and political stability of the region.
5-7% 24-27%
Donetsk region Lviv region
134. 18
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
Œ‚ƒ—˜ † „ˆ•†˜ †™•„ – „‡‚
‡˜ ŽŒ†† ‚„„‚
SMALL AND MEDIUM BUSINESSES
AS THE BACKBONE OF DONBAS ECONOMY
„ ,
139. ,
In order to motivate small and medium businesses to return to the region,
to increase their role in the regional economy, it is necessary not only
to restore the infrastructure, but also to create tax and regulatory
incentives for the development of small and medium-sized
businesses in the region:
Exemption of entrepreneurs and citizens in the ATO area from
paying taxes, penalties and credit installments, accumulated
over the period of military actions
Simpli“ed procedure for registration of enterprises
Tax incentives in the form of a 10 years vacation for entrepreneurs,
working on the territories, aŸected within the framework of ATO
State crediting programs for regional business, involvement of
commercial banks to these programs
«»
146. .
As a pilot project, we consider it necessary to create
industry-speci“c «business-incubators» on the basis of
depressed miners’ villages and towns, devastated by the war,
with full exemption of entrepreneurs from taxes, free provision
of premises, land plots. Priority should be given not to outdated
industry, but startups in the Šeld of the IT industry, high-tech,
medicine and other perspective industries.
147. 19 C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
‚„„ - ŽŒ†•„†˜ œ‚
Œ•› ‡„…Œ † ™‚‚Œ
DONBAS AS AN ECONOMIC HUB
BETWEEN THE EAST AND THE WEST
-
149. , „ ,
.
Creation of Export Processing Zone (EPZ) on the territory of the region, which
will be oriented on both the CU market, and the EU market, which will allow
Donbas to recover the economy, to preserve old and to create new jobs.
Simpli“ed procedure for registration of enterprises
: The priviliged enterprises will be obliged to:
ˆ
153. .
The implemented measures will result in the rise of investment attractiveness
and business activity in the region. Investors and big industrialists will be
interested in reconstruction and modernization of worn-out infrastructure.
The volume of foreign exchange earnings will surely increase against the
background of possible reduction of tax and customs budget payments.
†
Investment tax credits
156. ‡
›œ
Create new jobs in the region
Modernize manufacturing/production
Restore the infrastructure and housing and utility sector of the region
,
… “,
:
Enterprises, working within the EPZ, should get the
following opportunities:
€
Complete exemption of the new equipment
from import duties
€
,
,
157. Partial exemption from import duties on semi-“nished materials,
raw materials, imported to the enterprises of the area
158. 20
C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
‚„„ - ŽŒ†•„†˜ œ‚
Œ•› ‡„…Œ † ™‚‚Œ
DONBAS AS AN ECONOMIC HUB
BETWEEN THE EAST AND THE WEST
For reference:
:
One of the Šrst areas in the world practice, specializing in manufacturing
of export products since the day of its foundation, is an Export Processing
Zone Shannon in Ireland, founded in 1959 in the vicinity of cognominal
airport, located in the western part of the Shannon river frith. Due to
convenient transport connections, as well as provision of a number of
beneŠts to potential investors, in particular, the duty-free import of raw
materials, semi-Šnished products and components, low-rent for the
factory premises and warehouses, simpliŠed procedures for investment
and comfortable living conditions, the Shannon Zone had pretty quickly
achieved impressive successes.
Enterprises, located in Shannon, produce electronic equipment, industrial
diamonds, the equipment for well-drilling, goods of the mass consumer
demand, etc. The volume of export had increased from 230 million dollars
in 1980 to 1 billion dollars in 1994. Shannon turned into the prosperous
industrial center of the western part of Ireland.
Ž
169. 21 C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE
ˆ•ƒ•†• ‰Œ‚†…‚ˆ˜
‚…‚„…ˆž—
OVERCOMING THE HUMANITARIAN
CATASTROPHE
170. € „:
We can see three components of overcoming the humanitarian
catastrophe in Donbas:
„
171.
1
Creation of conditions for the voluntary return of IDPs to
their places of permanent residence
„. „
€
172. .
–
.
™
€€
,
€ .
, €
.
Establishment of a special Coordination Center for assistance to
internally displaced people in Donbas. Activities of the center
should be regulated by a special law and should not duplicate the
functions of regional state administrations and local authorities. A
key goal of the center – is a strategic management of the process of
return of IDPs to the places of permanent residence. Centralization
of policy for IDPs will allow to avoid bureaucratic delays and
to e‹ectively coordinate the process of provision of
assistance, rehabilitation of infrastructure and ensuring
security. In addition, this body will become a single
information and consultation center for all IDPs.
173. C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE 22
ˆ•ƒ•†• ‰Œ‚†…‚ˆ˜
‚…‚„…ˆž—
OVERCOMING THE HUMANITARIAN
CATASTROPHE
„
177. .
“
:
It is necessary to improve and to execute the law that will protect
the property, social and other rights of IDPs, who do not want to go
back to the combat actions area.
It is necessary that the law would regulate the following issues:
temporary accommodation and provision of
necessary assistance in settlement
(of the necessary facilities)
renewal of social payments, registration at the labor
exchange, in polyclinics and schools
transfer of students on similar specialties to higher
education institutions
payment of a monthly allowance to IDPs, who have
returned to the ATO area within 1 year
186. )
:
Formation of the Municipal police, accountable to the
community
Civilian control over the activities of law enforcement
agencies (joint patrols, intensiŠed monitoring of human
rights observance on the part of public organizations)
’
;
188. ,
Strengthening control over the circulation of
weapons:
Quarterly amnesty of owners of unregistered weapons
under condition of its surrender;
Strengthening of control in the places of mass gathering
of people - installation of metal detection arches at
railway stations, stadiums
189. C
. BUILDING NEW DONBAS. HOW TO OVERCOME THE COLLAPSE 24
ˆ•ƒ•†• ‰Œ‚†…‚ˆ˜
‚…‚„…ˆž—
OVERCOMING THE HUMANITARIAN
CATASTROPHE
197. .
Not only economy of Donbas, but economy of the whole Ukraine needs
structural changes. Naturally, the most important thing today for Ukraine and
its citizens is to restore peace. But now it is the time to think about what will
happen not just tomorrow, but the day after tomorrow. To think about how to
prevent new conŒicts, how to reach a political consensus in the society and to
accommodate interests of all citizens, regardless of their region of residence.
We must not only restore the war-torn regions, but already now we must
provide growth drivers for our economy, which will allow increasing the level
of material well-being of every Ukrainian family for decades to come.
†
…
. ’
.
My colleagues and I have developed a detailed program of economic
breakthrough for Ukraine. Its implementation will allow enhancing
competitiveness and revealing the potential of the country as a whole
and of each region with its special features and capabilities.
198.
ECONOMIC BREAKTHROUGH FOR UKRAINE
“ 10 2014 : During the 10 months of 2014:
†
16,2%
Ination
16,2%
‡
1,5%
Military
tax
1,5%
26
ƒ€ 16,2%
‡
,
,
. ‚, 1,5%
203. ,
.
InŒation since the beginning of the year has already
reached 16,2% and continues to grow
75%
Devaluation
up to
75%
„
204. – –
75%: 8 . 1
2013 13-14 . 1 2014
The devaluation of the national currency - hryvnia -
is up to 75%: from 8 UAH per 1 dollar in November
2013, to 13-14 UAH per 1 dollar in October 2014
‡‡
5,1%
III
Drop of GDP
to 5,1%
in the
III quarter
1,1%
2014 , 4,6% - 5,1% -
Drop of Ukrainian GDP amounted to 1.1% in the Šrst
quarter of 2014, 4.6% - in the second and 5.1% - in the
third
Hoping to bring in additional tax revenues into the
budget, over the past six months Ukrainian
Government has introduced new taxes, has
increased rental rates and fee rates. So, a 1,5%
military tax has been introduced, the excise tax on
alcohol and tobacco products has repeatedly
increased, excise tax on new cars has doubled,
environmental tax has increased, as well as land tax,
tax for the special use of water, etc.
205. 27
ECONOMIC BREAKTHROUGH FOR UKRAINE
Ž
:
The main directions of the program
of economic breakthrough:
206. :
Development of the internal investment market and
innovative reconstruction of the existing production
potential:
210. ,
.
€
,
€
Policy of reindustrialization of basic industries - modernization
of production, introduction of high technology into the manufacturing
process, increasing the level of labor safety. Introduction of tax
on old capital assets to stimulate modernization and re-equipment
of production, as well as replenishment of the Pension Fund
Ž
214. .
-
Nationwide program for all industrial enterprises on modernization of
production, introduction of innovative technologies, technological
re-equipment of agro-industrial complex
Government lending and borrowing for infrastructure projects and
projects of reconstruction of housing and utilities
Improving the innovation component of the economy. State support
of innovative startups
215.
ECONOMIC BREAKTHROUGH FOR UKRAINE 28
€
217. ’ ‰
.
Improving the competitiveness of domestic producers on the
domestic and foreign markets
It is necessary to create all conditions for domestic enterprises so that
they were able to take advantage of the Association Agreement,
signed by Ukraine and EU, and to minimize the negative
consequences for themselves at the same time.
Subsidies from the state budget for modernization of enterprises and for
certiŠcation of products for the EU markets
Introduction of the institute of Authorized Economic Operator in
Ukraine, its synchronization with similar institutions in the EU.
On the eve of possible signing of the Association Agreement with the EU,
in the autumn of 2013, Ukraine has been preparing for introduction of
this institute. It would allow to substantially simplify the issue of
movement of goods across borders. Now the Association Agreement is
signed and the creation of this institute is extremely important and
necessary
„
220. Establishment of the Institute of Economic Attaché at embassies and
diplomatic missions abroad to assist Ukrainian enterprises in entering
foreign markets
€
223.
The “ght against monopolism, creating opportunities for a
free competition
,
Fight against monopolies, improvement of antimonopoly legislation
227.
Creating equal opportunities for all market participants, promotion of
fair competition
Reorientation of the oligarchic economy on the free market economy
… – Point of pro“t in Ukraine
€€
€
231. Ž’
Fight against withdrawal of capital into o‹shore and low-tax jurisdictions
by means of the full-Œedged implementation of the Law on transfer
pricing and Ukraine's accession to the global system of automatic
exchange of tax information, which is formed in within the framework of
BEPS plan under the auspices of the OSCE
232.
ECONOMIC BREAKTHROUGH FOR UKRAINE 30
“ € (‚™Ž)
2013
,
‰ .
€
Law on transfer pricing (TP) was adopted in Ukraine in 2013 at the
initiative of the Ministry of Revenue and Duties, which at that time
was headed by Minister Oleksandr Klymenko. Mechanisms of control
over transfer pricing, implemented in Ukraine, were agreed upon
Second half
of 2013
First half
of 2014
UAH
113,3
billion
UAH
+19,7
billion
UAH
133
billion
with business, enjoyed the support and
positive feedback from experts both in
Ukraine and abroad. As a result, in
December 2013, the volume of export
operations from Ukraine through
o‹shore zones has been halved.
Ukrainian companies had to prepare
and submit the Šrst reports on TP by
May 1, 2014. But, in the spring of 2014,
introduction of norms of transfer
pricing control was suspended at the
initiative of the new Government.
As a result, in 2014, 75% of export
transactions have been carried out by
indirect contracts. For 6 months of 2014
with the help of indirect export
contracts UAH 133 billion has already
,
,
.
, 2013
236. 2,6 . .
gone from Ukraine to the countries with preferential tax treatment.
This is by UAH 19,7 billion more than in the second half of 2013. As a
result, Ukrainian budget is under risk to short-receive revenues in the
amount of UAH 2,6 billion.
The growth of operation’s volume
of indirect export contracts
242. € š”
Extensive use of biofuels and other alternative fuels in industry and
private households to reduce dependence on Russian gas
Active introduction of energy saving technologies into the sphere of
housing and utilities
€€
State program for improvement of energy e›ciency of production
243.
ECONOMIC BREAKTHROUGH FOR UKRAINE 32
246. , .
State support of priority branches of economy
The Government should select priority specializations for its own
economy. These are branches that trigger a spiral of economic growth
and social development, create jobs. The Government must take all
possible measures to use all tools to support, protect and stimulate the
development of industry branches on which the stake is placed.
247.
:
‰
We consider it necessary to single out
the following industry branches:
-
250. €
Agrarian industry
Mechanical engineering industry and precision instruments industry
Military-industrial complex
Pharmacology and medical engineering
Housing and utilities sector
Construction of residential real estate and infrastructure
252.
‘
ˆ €
,
ˆ €
Temporary tax and customs preferences for the enterprises of
priority industries
Provision of concessional loans for business development
Encouragement of export
Elimination of regulatory barriers
Regulation of rates for beneŠt of own producer, not
the importer
Development of infrastructure for new productions
Provision of public contracts
253. 33
ECONOMIC BREAKTHROUGH FOR UKRAINE
„
,
254. Freedom of private initiative, support for small and
medium businesses
.
, –
, .
255.
,
,
We must bring private enterprises back on the road of
revival. Every person should be given an opportunity to
make the best use of his talents, and the task of the state –
is to create structures and conditions under which this can
be done. We consider it necessary to provide support to
entrepreneurial initiatives in Ukraine by creating favorable
and stable tax climate, introduction of a‹ordable and
acceptable credit programs, reducing bureaucracy and
bureaucratic arbitrariness
€
()
Enhancement (simpli“cation) of tax treatment
256. € , ,
, , . ‡
-
,
,
€-
. Ž
,
Rules and regulations in the tax sphere should be transparent, stable
and most importantly, equal for all. Our priorities - a fair tax system,
maximum support to small and medium-sized businesses, inventorying
and curtailment of unjustiŠed tax incentives of large businesses and
Šnancial-industrial groups. Combining of social contributions and
income tax, reducing the burden on wages
260. . 90%
,
, .
Minimization of bureaucracy within the licensing system
Too much of the budget funds in Ukraine are being spent on maintain-ing
the state apparatus. These funds go to the o›cials, who are
engaged in issuance of documents, 90% of which, according to the
business, are not needed.
: Today in Ukraine there are:
Over 1,6 million of civil servants/o›cials
Over 3000 various licensing and approval procedures
1,6
3000
24 State Services, 14 State Agencies and 11 State Inspectorates, that issue
various licenses and approvals, conduct inspections
24 , 14 11
271. ,
, .
We believe that Ukraine needs a systematic approach to deregulation,
restriction of intervention of o›cials into business activity, simpliŠcation
of rules to conduct business, creation of conditions for the fair
competition and ensuring real protection of entrepreneurs and
consumers.
Therefore, the obvious and primary step is inventorying, together with
business, of all authorization documents and regulatory procedures,
establishment of programs of their phasing out. We are setting a goal to
abolish and to combine a part of inspectorates, to reduce the number of
licenses and authorization documents, to make the procedure of their
273. )
Overcoming corruption and ascertainment of zero tolerance
to this phenomenon in society
Today, Ukraine takes the 130th place in the world on corruption level
(between Uganda and Cameroon)
,
277. -20
We are sure that implementation of this anti-corruption strategy will
allow to reduce considerably corruption level in authorities, government
institutions and budget sphere. Within 5 years, thanks to implementation
of this strategy, Ukraine could take a worthy place in top-20 of the least
corrupted countries of the world
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,
,
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279. (, , ‡ “,
˜, , ‡, ƒ, .)
Years of struggle and change of consciousness are needed in
order to overcome corruption that has Šrmly rooted not only
in practice, but also in minds of Ukrainians. But we are
conŠdent that through the introduction of a few simple
steps, one can quite soon qualitatively change the situation.
In order to Šght corruption, we have developed a large-scale
anti-corruption strategy, which is based on the world's most
successful practices in the Šght against corruption (Singa-pore,
Hong Kong, New Zealand, Sweden, Canada, the Nether-lands,
Israel, Germany, and others)
280.
ECONOMIC BREAKTHROUGH FOR UKRAINE 36
Overcoming corruption and ascertainment of zero tolerance
to this phenomenon in society
Perfection of veriŠcation of declarations of public o›cials
concerning their property, income, expenses and Šnancial
obligations
285.
, , €
Among measures, proposed by us within the framework
of anti-corruption strategy:
Beginning of the e‹ective National Anti-Corruption Bureau work for the
systematic struggling against corruption in the public sector and budget
organizations
,
287.
Adoption and adherence of policy, governing the conŒict
of interests
Strengthening of anti-corruption veriŠcation of applicants for positions in
the public sector and budget organizations
—
293. Harsher punishment of o›cials and employees of public sector for
corruption
Involvement of public organizations and representatives of private
business to the Šght against corruption, more powers and authority to
citizens for Šghting corruption
… €
€
˜
294. Electronization and automation of processes in the Šeld of provision
government services in order to minimize the human factor
Large-scale implementation of anti-corruption educational program
in Ukraine
302.
œ.
The rights of private property shall be most protected. An entrepreneur
should be provided with available and reliable instruments of protection
of his rights in judicial and law-enforcement system.
For this purpose we propose to introduce an institute of
Business-Ombudsman in Ukraine, who will protect the interests of both
Ukrainian and foreign businesses in Ukraine. Support in implementation
of this institute in 2013 was guaranteed by the president of European
Bank for Reconstruction and Development Suma Chakrabarti.
313. , ,
, –
The primary task is to overcome corruption at the border. To solve this
problem, we propose the creation of a single control service on the
border – a Services One-Stop for all regulatory bodies and customs
with the maximum automation and electronization of all procedures,
including in Ukrainian ports.
It is necessary to maximally develop transit potential of Ukraine. For this
purpose we propose to reduce transit fees, abolish of quotas and other
obstacles to road transportation of goods across the country. Thus to
avoid abuses, it is necessary to introduce special instruments,
guaranteeing, that goods will be exported from Ukraine - electronic locks
323. €€ :
Today, in order to recover its investment potential and to increase com-petitiveness
in world markets, Ukraine needs to ensure a decisive liberal-ization
of the rules of conduct business. Ukrainian tax system needs
transformations that would open access to entrepreneurship to anyone
who feels the strength and desire to act. This entails not just arithmetical
reduction in the number of taxes, but also qualitative transformations,
stimulating entrepreneurial initiative. This will allow pulling national
economy out of the dive
Three systemic steps in the tax policy, which will have an enormous
positive e‹ect for business are enough for this purpose:
1
Œ
2
„
324. 3
Deregulation of doing business
Maximum simpli“cation of reporting
Reduction of the time for paying taxes
332.
This will signiŠcantly simplify tax reporting by reducing document
Œow and reducing time spent on paying taxes. Corresponding
initiative was proposed by the Ministry of Revenue and Duties in
January 2014 and subsequently received approving comments of
the public and business. The new Government has actually frozen
implementation of this reform, and has assigned it a marginal
signiŠcance
2
‰
135 22.
335. In less than 2 years Ministry of Revenues and Duties of Ukraine led
by Oleksandr Klymenko was able to reduce the number of taxes
and duties in Ukraine from 135 to 22. Within the framework of
continuation of the work on systemic simpli cation of the tax
system, a concept on reduction of number of taxes and duties up to
10 has been developed, with a signi cant simpli cation of reporting
and reduction of payment periods. Implementation of this reform
will allow making tax system simpler and reducing the time and
resources of business for administering of tax payments
343. Doing Business
According to the businessmen, electronic
services, which were implemented in tax
and customs areas in 2012-2013, consider-ably
simpliŠed business environment in
Ukraine. These assessments are reŒected in
the Ukrainian success in the World Bank
Doing Business
‚
347. Such initiative will make tax accounting simpler and clearer, will
reduce the amount of time and cost for both business and tax
o›cials. This convergence, as a strategic objective, has been
documented in the Tax Code of Ukraine, adopted in 2011. Ministry
of Revenue and Duties, together with the Investment Council
formalized this idea into a concept that was presented in February
2014. Now it is necessary to complement the existing framework
document with an implementation algorithm and to bring it into
action
Ukraine in rankings Doing Business-2012, 2013, 2014, 2015:
Position
112
2014
Position
96
2015
Position
140
Position
152
2012 2013
353. €.
A full-scale launch of the Electronic Taxpayer Cabinet and Electronic
Remote Business Audits are the priority issues. Contacts of business
and the state at the level of e-services would not only signiŠcantly
speed up the procedural issues, but would eliminate the human factor.
Ž Electronic Taxpayer Cabinet
…
2013
357. This tool has been put into operation in 2013 in the framework of
systemic work on simpliŠcation of procedures. Today, it has a great
potential to expand its use. In particular, the electronic cabinet can
become the basis for uniŠcation of all types of public administrative
services, provided to citizens, on the principle of single window.
This will ensure savings of time and e‹ort to citizens and business,
it will allow to execute documents and get certiŠcates/licenses in a
few minutes, without having to visit governmental agencies
Ž
363. This tool has started working on January 1, 2014. Its main function,
in addition to simpliŠcation of procedural issues is to reduce the
corruption risks and administrative pressure on business. Within the
framework of work of the new tax agency, the State Fiscal Service,
remote audits had not been canceled, but, virtually, are frozen and
are not used. No popularization or development of this technology,
no encouragement of taxpayers to use such service is observed
373. Most of the reforms that are required in Ukraine now, have already
started being implemented in previous years. Today it is necessary
to cast away political prejudices, and to ensure the continuity of the
reforms and their predictability for citizens, businesses and foreign
partners.
At the time of crisis and entry into the European markets, an
important point in reforming Ukraine is creation of partnerships
between business and the state, support in discovering new
horizons. The State must not only listen, but actually hear the
business.
Only dialogue, only the search for a compromise will allow both, to
extinguish the conŒict in Donbas, and to put into motion economic
reforms in the whole country.
377. „ –
!
From our side we, the whole team of experts under the
leadership of Oleksandr Klymenko, are willing to apply all
our experience and knowledge in order to make our dream
and the dream of millions of Ukrainians - a peaceful and
prosperous Donbas and Ukraine as a whole – come true !
! Thank you for your attention !
378. About Oleksandr Klymenko
Oleksandr Klymenko, 34, is considered by many to be the nancial wunderkind of
the economy of Ukraine. Despite his relative youth, Klymenko, who holds a
doctoral degree in nance, was able to introduce reform and transparency to
virtually every level of the Ukrainian tax, duties and customs system despite the
barriers of conservatism and self-interest he had to ght along the way.
In particular, Oleksandr Klymenko’s tenure as Minister of Revenue and Duties in
the previous government was marked by a consistent integration of the
Ukrainian tax system with European Union members, motivated by the explicit
goal of attracting signicant foreign investment into the economy
https://facebook.com/VosstanovleniyeDonbassa http://oleksandrklymenko.com
In the presentation was used photographs by Reuters, AFP, Getty Images, .ˆ, Associated Press, Andy Rocchelli/Cesura/LUZ, Evgenii Shibalov/Facebook, Sergey Bogachov/Facebook, Roman Pilipey/EPA/UPG,
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