EBA urges parliament, govt to take comprehensive measures to support businesses amid war-related risks
The European Business Association (EBA) has appealed to Ukrainian Prime Minister Serhiy Koretsky, the government, the Verkhovna Rada, and the leadership of the tax and customs authorities with a package of proposals to support businesses amid escalating military risks, developed based on the results of meetings with companies that have suffered losses due to Russia's armed aggression.
According to a press release obtained by Interfax-Ukraine, the association proposes introducing a unified mechanism for recording losses based on the principle of a single submission of documents to government agencies, insurers, and banks, prohibit the State Tax Service from requesting data from state registries, simplify and regulate the cost of disposing of goods destroyed by hostilities or compensation for these expenses, and to simplify the procedure for updating entries in the Register of Damaged Property in the event of repeated strikes. To ensure that businesses have sufficient staff, it is proposed to extend the validity of the status of critically important facilities and existing staffing quotas until the end of the current year or until restoration is complete, as well as to increase the staffing quota limits.
Among the proposals in the area of financing is the automation of access for affected enterprises to preferential loans, grants, insurance pay-outs, tax breaks, and preferential leases. The EBA calls for expanding the compensation program through the Export Credit Agency (ECA) to include Kyiv and Kyiv region, raising property compensation limits from UAH 30 million to UAH 60 million, and for manufacturers and exporters – to UAH 100 million. At the same time, the business community has expressed its willingness to increase its own contribution to the premium from 1% to 2% of the insured amount in exchange for doubling the coverage limits. In addition, it is proposed to establish a three-tier national system for insuring war risks and to begin negotiations with Switzerland regarding insurance for agricultural exports.
In the areas of taxation and customs, the association is calling for the exemption of destroyed or unusable property from land rent and taxes on land and real estate throughout Ukraine, the suspension of the automatic blocking of VAT invoices for businesses that have declared an inability to fulfill their obligations, the granting of tax holidays, and the introduction of a reduced personal income tax rate of 9% for businesses that have suffered losses but continue to operate. It is also proposed to regulate the refund of excise taxes paid on destroyed excisable goods, to ease the requirements for a stable financial condition for Authorized Economic Operators (AEOs), to restore simplified customs clearance of cargo with the option to quickly change the delivery location, abolish export duties on soybeans and rapeseed, exempt equipment for restoring communications and generator sets from import duties, and eliminate tax exemptions for international postal shipments valued at up to EUR 150.
In order to support specific industries, it is proposed to develop a program of preferential lending to maritime terminals in the amount of UAH 250 million to UAH 300 million at 1% per annum, temporarily exempt state-owned property in the ports of Odesa, Chornomorsk, and Pivdenny from rent in the event that ship calls are suspended due to shelling, suspend the requirement for mandatory video surveillance at tobacco product warehouses to facilitate their prompt retrieval, increase retail reservation limits to 70% (and up to 100% in frontline areas), and simplify customs and regulatory procedures to relocate and ensure the continuity of clinical trials for medications.
As previously reported, the government provided state-owned banks with portfolio guarantees totalling UAH 20.8 billion to expand lending to small and medium-sized businesses, and also initiated an audit of warehouse facilities held in the portfolio of the State Property Fund (SPF) and the Asset Recovery and Management Agency (ARMA).