On July 1st, the conference “Improving Business Conditions for MSMEs: Deregulation and De-shadowing” took place, organized by the Ukrainian Business Council and UNDP Ukraine. The event brought together representatives from the Verkhovna Rada, the Business Ombudsman, think tanks, BRDO, and business associations to address critical issues facing small and medium-sized enterprises (SMEs).
Key Challenges for Small and Medium-Sized Enterprises
The discussion centered on the daily operational hurdles for SMEs: the quality of government services, excessive fines, the blocking of tax invoices, RRO/PRRO (cash register) regulations, the implementation of e-TTN (electronic waybills), and the need for fair competition. For the Fuel and Energy Business Association (FEBA), these issues are paramount. The fuel market operates under immense regulatory, tax, and security pressure; therefore, legislative changes must be evaluated not just by fiscal control, but by the business viability, especially for smaller operators.
Identified Problems vs. Practical Solutions
While the “Pulse” system has successfully identified key pain points in business-state interactions, participants emphasized that identification is not enough—concrete management decisions are required.
Key areas needing urgent regulatory change:
- Lack of unification and predictability in RRO/PRRO rules.
- The practice of imposing disproportionate fines.
- The blocking of tax invoices and unstable risk-monitoring systems.
- Technical instability of State Tax Service electronic services.
The Problem of Excessive Fines
A central topic was the need to distinguish between intentional tax evasion and technical or minor errors that cause no harm to the budget.
Proposed solutions include:
- Eliminating the duplication of fines and interest for late payments.
- Replacing excessive RRO fines with fixed penalties for technical errors.
- Applying fines for non-registration of tax invoices only upon a counterparty’s complaint.
- Focusing control on real budget risks rather than formal violations.
For the fuel market, where gas stations handle high volumes of daily operations, excise administration, and complex reporting, a technical error must not automatically threaten the existence of an enterprise.
Fair Competition and Digitalization
The conference also highlighted the need for equal competitive conditions, citing discriminatory restrictions in government programs like “National Cashback,” which currently limits the participation of sole proprietors (FOPs). Furthermore, the push for e-TTN (electronic waybills) must be phased and technically tested to avoid operational failures before it becomes mandatory.
Support for Frontline Fuel Infrastructure
A critical point raised was the issue of advance corporate income tax payments for destroyed gas stations. FEBA insists that fuel infrastructure in frontline and affected regions performs a vital societal function. Demanding fixed advance payments from businesses that have had their property destroyed by shelling creates an unnecessary barrier to recovery.
Business Needs Practical Change
The participants agreed to form joint working groups to develop amendments to the Tax Code and the Law on RROs. FEBA supports a collaborative approach where deregulation and digitalization work with business, not against it. Entrepreneurs need predictable rules, fair accountability, and stable services to keep the economy moving during the war.
