Hetmantsev's “White Business Club” turned out to be anti-reform

The creation of the "white business club" in Ukraine was the first anti-reform in a long time. This is the conclusion reached by experts of the independent analytical platform Vox Ukraine, UNN reports.

"The 243rd issue of the Reform Index for the period from July 15 to July 28 included 7 regulations, and the Index value was 0.8 points. For the first time in a long time, we have recorded an anti-reform, the law on the "white business club", which provides special conditions for responsible taxpayers. In the previous issue, the Index value was 0.5 points," the report says.

Experts of the analytical platform reminded that the Law on taxpayers with a high level of voluntary compliance with tax legislation defines criteria for identifying the most responsible companies and offers preferences for them. The preferences include a moratorium on certain documentary audits and a reduction in the timeframe for audits for budget reimbursement; faster provision of tax advice and the allocation of a separate compliance manager. The State Tax Service of Ukraine will publish the list of responsible taxpayers on its website on a quarterly basis.

The criteria for being included in the list include not only the absence of unified social tax arrears and significant tax debt, but also the amount of taxes paid. In particular, to be included in the list, legal entities must pay income tax in the amount not less than the average industry figure for the last year. The amount of salary at such enterprises must be at least 10% higher than the average in the industry in the region where the payer is registered. The list will also include Diia.City residents who pay a tax rate not less than the average among the platform's residents. Individual entrepreneurs can take advantage if they pay taxes higher than the industry average, have at least five employees who are paid at least 10% higher than the average salary in a particular industry in the region where they are registered.

Analysts are convinced that these requirements do not actually describe dishonest tax payments, but rather the size of the enterprise, where larger taxpayers receive preferences and small ones have no chance to join the "white business club." The Index's experts negatively assessed the law, because instead of ensuring the rule of law, predictability of actions and creating a level playing field for everyone, the state creates special conditions for certain companies.

The idea of a "white business club" (a business that pays taxes in good faith) in theory evokes positive associations, because it is based on a risk-oriented approach that ensures a more rational use of the resources of inspection bodies, which are certainly not enough to inspect everyone. On the other hand, it violates the basic principle of the same "rules of the game for all", because a group of enterprises selected according to certain criteria will be formed, for which other "rules of the game" will apply. Given the large number of criteria and Ukraine's previous experience, when special conditions created corruption risks and the desire to obtain them inexpensively, it seems that the law will not lead to a positive effect, but will create and consolidate unequal conditions in the market

Recall 

The Verkhovna Rada of Ukraine has passed the scandalous draft law on the "white business club" by the head of the parliament's tax committee, Danylo Hetmantsev. The document was criticized by both Mr. Hetmantsev's colleagues in parliament and experts. Even legal opinions stated that it did not comply with Ukrainian law.

In their comments to UNN , economic experts pointed out that the document violates the Constitution of Ukraine and creates discriminatory conditions in the business environment. 

The fact that Hetmantsev's draft law contains discriminatory norms and has corruption risks, is also stated in the conclusion of analysts of the Union of Ukrainian Entrepreneurs.  

Business Ombudsman Roman Vashchuk also stated that the draft law on the "white business club" is discriminatory.

Add

Earlier, UNN  described how social media reacted to Hetmantsev's initiative to create a "white business club." Ukrainians, in particular, believe that his bill is an instruction manual for milking a half-dead cow, and that the MP himself is a disaster for the Ukrainian economy.