Or how Ukrainian business and government in conditions of war
Support of the economy and preservation of jobs in the conditions of war is one of the essential tasks of the Ukrainian authorities. Realizing this, our government has introduced some state programs to support business. In addition, donor programs and private initiatives are currently in place to preserve and stabilize Ukraine’s economic resources.
Even though many cities and villages in our country were in the zone of fighting, and the enterprises were located in the back. there were problems with raw materials, logistics, and lack of funds. Ukrainian business continues to work, support their employees and pay wages.
And it also finds opportunities and resources for financial support of the Armed Forces, provides free volunteer assistance, and implements functional free initiatives for Ukrainian citizens.
"Since the beginning of the war, our economy has lost at least twice.Many businesses closed, and thousands of people lost their jobs. My business was also badly injured. But this is not the reason to let your hands down. We need to be reorganized and ready for any challenge because it is not known how long we have to live in in the new reality," he wrote on his Facebook page , entrepreneur and blogger Orest Zub. And in such difficult conditions, there was a majority of Ukrainian entrepreneurs.
That is why the working representatives of business became "heroes of the invisible front" which made an invaluable contribution to the victory over Russian invaders. The Verkhovna Rada has introduced some state initiatives and tax changes to support the Ukrainian economy in a in war time
Tax innovations
On March 15, 2022, the Bill "on amendments to the Tax Code of Ukraine and other legislative acts of Ukraine concerning the validity of norms for the period of the military condition" № 7137-d, which envisages significant changes for the period of the military condition.
According to the new rules, the most revolutionary is the possibility of IP and legal entities with turnover of up to UAH 10 billion to use a simplified tax system with a rate of only 2% of turnover without VAT.
Also, the law provides:
- Voluntary payment of a single tax for individual entrepreneurs of groups 1 and 2;
- Exemption from payment of SSP, fines, penalties, and audits on SSP;
- Exemption from land and environmental taxes on the territories defined by the cabinet;
- Reduction of tax on defense goods, reduction of VAT to 7%, and exemption from excise duty on fuel;
- Exemption from taxation of charitable aid to victims of Russian aggression and other changes aimed at easing the tax burden on Ukrainian business.
Credit programs
During the military situation, the government provides an opportunity for any enterprises where the ultimate beneficiaries with a share of more than 50% are Ukrainians to take advantage of preferential loans of 0% up to 60 million hryvnias under the program "5-7-9%". The term of crediting will depend on the target assignment of credit funds with a maximum term of up to 5 years (refinancing of credit debt) and up to 3 years (financing of working capital).
According to the program, during the period of the military state, there will be no restrictions on the size of acceptable state aid, expanded possibilities of support for agricultural producers.
Support of agrarians
Also, at the Ministry of Agrarian Policy and Food of Ukraine initiative, the government approved changes to the provision of financial state support to agrarians during the sowing campaign.
The Minister of Agrarian Policy and Food of Ukraine, Roman Leshchenko, stressed that in spring, agrarians always need additional funding for the period of sowing.
"The result of the whole work season depends on how well we can organize the spring-field work," he said.
Support provided for agrarians under the law:
- Envisaged for small and medium-sized agricultural enterprises-producers with a turnover of not more than 20 million euros per year, which is equivalent to the enterprise which processes up to 10 000 hectares;
- Compensation of interest rate on attracted credits;
- The maximum amount of credit for which interest rate compensation is applied is UAH 50 million;
- Crediting is provided for agricultural activity (sowing) for the period of the military condition;
- To obtain loans, the business entity must also be an agricultural commodity producer in the value given in the Law of Ukraine "on State Support of Agriculture of Ukraine";
- The loan term is six months;
- The maximum amount of the state guarantee for portfolio loans is set to 80%.
In addition, to provide agricultural producers with seeds for sowing in Ukraine at the time of the military condition, additional procedures on certification of seed material were canceled, the operation of agricultural machinery without registration was allowed, and an official agrarian platform on a gathering of urgent needs of farmers for sowing in real-time mode was launched, as well as, an online platform was created to improve the logistics routes of farmers in military conditions.
Export
In connection with the introduction of the military situation, export activity has also changed. In particular, the increased list of goods whose export authorization will be issued by the Ministry of Economy of Ukraine. Exporting wheat and mixtures of wheat and rye (meslin), corn, meat, and eggs of fresh sunflower oil is subject to licensing.
Export prohibited: Oats, millet, buckwheat, sugar, salt, Rye, cattle, meat, and subproducts from cattle. Other goods are exported in a pre-war legal regime.
In addition, the office for business and export development has launched an operational platform with up-to-date information for Ukrainian exporters, who can supply their products abroad in modern realities, and created a form for forming a base of Ukrainian exporters and further cooperation with their potential customers.
Relocation of enterprises from affected regions and employment of internally displaced persons
The state program of relocation of enterprises to safe regions assists in selecting places for production facilities, transportation, and resettlement of personnel and the search for new employees. Both large and small companies with 10-20 employees can use the service. Applications from strategically essential companies and producers of first-order goods are being processed as a priority.
Also, a program to compensate employers for the salaries of internally displaced persons in the amount of 6,5 thousand UAH for each employee for two months has been introduced to support displaced people and local businesses.
Public, donor, and private initiatives to support business
To improve communication, effective interaction and facilitate business in complex military conditions, there are numerous additional platforms, programs, and objects: From the search of orders, manufacturers provision free legal, informational, logistical, financial, and other assistance. Before example:
- National food security platform;
- Biz for Ukraine is a platform for the search for international locations for Ukrainian entrepreneurs, created by the Institute of Marketing (Estonia) in cooperation with the office for development of entrepreneurship and export;
- Services for checking the owner of the company for communication with russia and belarus;
- Trade and service platform LITEPROM for the light industry;
- "Jabka" — Free mobile application for receiving cashless payment, without the need to install a POS-terminal;
- Free legal aid Telegram channel for Ukrainians during the war, created by volunteer lawyers and many other useful projects.
Today, we can observe a unique situation in which, for the first time in Ukrainian history, the state and business United in confrontation with Russian invaders on all fronts and together did everything to bring such a desired victory.
*Data from open sources
Translation by Yana Bilokon
Traduction française : Céline GISSINGER