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Is the government doing enough to help Ukrainians and businesses overcome the coronavirus crisis?

Is the government doing enough to help Ukrainians and businesses overcome the coronavirus crisis?

Ukraine is beginning to quit quarantine, but economists around the world are claiming that the consequences of the pandemic in the form of an economic crisis is just beginning. Is Ukraine doing enough to help the business and citizens overcome the economic consequences of the pandemic? In March and April 2020, the Verkhovna Rada of Ukraine adopted two sets of laws aimed at supporting citizens and businesses during quarantine. The total value of the adopted packages of laws is 8 billion UAH. for business and 9 billion UAH. for citizens. This is the saving of FOPs on ERUs in the amount of 2.8 billion UAH., 1.8 billion UAH. – this is a land tax, 2.8 billion UAH. – rent and 0.7 billion UAH. – property tax.

This is not very much, only 0.2% of Ukraine’s GDP per year, compared to other countries that invest tens of billions of dollars or euros – who have 1% of GDP, who have 1.5%, and in the USA it is almost 5%. Unfortunately, this anti-crisis package does not take into account that some sectors will suffer more and others less, business size is not taken into account.

What protective measures and weaknesses are provided by law:

  • for March and April, ERUs are not paid by individual entrepreneurs, self-employed and members of farms;
  • from March 1 to May 31, the business is exempted from basic fines and penalties for violation of tax laws. This rule does not apply to violations of VAT, excise taxes and rents;
  • increased limits on annual income for FLP of all groups;
  • the mandatory introduction of the PPO has been delayed until April 1, 2021. Also, all the terms of mandatory use of PPO for various categories of business entities have shifted by 3 months;
  • established a moratorium on documentary and factual audits from March 18 to June 30, 2020;
  • tenants who cannot use real estate or other property due to quarantine are exempted from paying rent;
  • violation of the deadlines for submitting financial statements will not entail liability for a quarantine period + 90 days;
  • the deadline for the payment of personal income tax has been extended until October 1, 2020;
  • for the period from March 1 to April 30, 2020, land payments (land tax and rent for land plots of state and communal property), for land owned or used, including under lease terms, are not charged or paid; individuals or legal entities and used by them in economic activities.

Current legislation encourages taxpayers to participate in the fight against COVID-19 coronavirus. Previously, the taxpayer had the right to a tax discount that relates to charitable activities (we are talking about donations or charitable contributions to non-profit organizations), not more than 4% of his taxable income for the year. Now, if the tax rebate refers to the amount of cash or the cost of goods aimed at combating the virus, then the amount of expenses is included in the tax rebate without any restrictions.

The legislation provides that by June 30, 2020, the import of goods necessary to combat the coronavirus is exempted from import duties, and for such import special simplifications of customs procedures are provided, there are no fees for customs formalities. Certain concessions and benefits are also provided for in the process of public procurement of goods, work or services, which are necessary for the implementation of measures aimed at combating the pandemic.

In addition, quarantine was recognized as one of the reasons for receiving partial unemployment benefits. Automatic extension of social payments for the quarantine period is provided. The law provides for the government’s ability to control the prices of goods necessary to prevent the spread of the coronavirus epidemic, and increased sanctions for violation of the established order by implementers.

However, these measures and the amount of government assistance allocated may not be enough. Everything will depend on the duration of the quarantine, the depth of the economic recession that it will cause, and its impact on various segments of the population and enterprises.

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