Ukrainian businesses offer new radical economic reform concept
Photo by Igor Gumennyy / Facebook

Eleven top managers and businessmen from the union of Ukrainian entrepreneurs have proposed a new concept of radical economic reform called ‘Ten for Ten’, which they say can bring a 10 percent GDP annual growth for ten years in a row.

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The proposal was published on Facebook by businessman Igor Gumennyy, president and co-founder of UBC Group, which produces refrigeration equipment.

It has been supported by Viacheslav Klimov and Volodymyr Popereshniuk, co-founders of Nova Poshta, Oleksandr Konotopskyi from Ajax, Andriy Stavnitser from TIS, Rostyslav Vovk  from Kormotech, Kostyantyn Yefymenko from Biopharma, Andrii Zdesenko from Biosphere, Vitaliy Ilchenko from Ukravit Agro, Volodymyr Lempert from Spetstechnosnastka, and Petro Chernyshov, former CEO Kyivstar and Carlsberg.

To achieve high growth rates for the Ukrainian economy, businesspeople suggest building an export-oriented industrial economy. They believe that the domestic market, service industries, and agriculture will not be able to generate anything close to such growth.

"In short: our country has to create the best conditions for doing business in Europe. If we have a 10-percent growth rate every year for ten years, the growth will be 2.6 times, and we will get about USD 9,000 [GDP per capita]," Mr Gumennyy said.

"In other words, we will reach about 60 percent of Poland's current GDP."

The prerequisites for the implementation of the concept are a full stop on coercive pressure on business, acceleration of customs work – up to one hour to cross the border – and a quick VAT refund for industrial exports.

The concept proposes eight reforms aimed at cutting taxes for businesses, thus reducing budget expenditures, and reducing government interference in their operations:

  1. Identifying areas of production that the state will incentivise
  2. Max deregulation
  3. Free and fast connection to electricity and gas networks with a certain amount of investment in new production
  4. Reduction of the unified social tax and exemption from most taxes for five years, subject to significant investments in production
  5. Strengthening decentralisation
  6. Simplification of labour legislation, including the possibility of quick and easy dismissal of employees, as in the United States
  7. A minimum number of new regulations that exist in the European Union, but in Ukraine will hinder the creation of new industrial companies
  8. Heavy budget cuts, except for the defence and security sector

Earlier, Ukrainian finance minister Sergii Marchenko warned that he would not support any tax reform with lower rates.