Business Ombudsman Council says record growth of complaints for second quarter in row

KYIV. Nov 15 (Interfax-Ukraine) – The number of complaints to the business ombudsman from entrepreneurs about violations by state bodies in July-September 2021 increased by 20% compared to the second quarter of 2021 and amounted to 638, Business Ombudsman Marcin Swiecicki said.

"In the third quarter of 2021, the council received 638 complaints from entrepreneurs about violations by government agencies. This is almost a record in our entire history. More complaints were received only in the fourth quarter of 2017 and the first quarter of 2018, when the system for automatic registration of tax invoices was launched," Swiecicki said during a press conference in Kyiv on Monday.

"If this trend continues, then by the end of 2021 we will receive record, in our entire history, over 2,000 complaints," the business ombudsman said.

At the same time, he noted that the growth of complaints may rather indicate the growing confidence in the Business Ombudsman Council, than the deterioration of the business climate.

He also noted that the Council completed the investigation into 373 cases in the third quarter, which is a 30% increase compared to April-June 2021.

Traditionally, the largest part of complaints was tax issues – 65%.

As the business ombudsman said, in July-September, 164 complaints were received about non-compliance with court decisions regarding registration of tax invoices and this category of complaints occupies the largest share among tax issues.

"From another point of view, about 80% of our recommendations on the implementation of court decisions regarding registration of tax invoices are being implemented," he added.

At the same time, Swiecicki said that although the number of complaints about the classification of companies as risky has decreased over the specified period, the problem of vague criteria remains.

"More than 90% of such complaints concern the general criterion that the company conducts risky transactions. But what kind of transactions are these? With whom, what do they concern? Companies simply do not know this. I will once again emphasize the need to clearly define what specific risky transactions are meant," the business ombudsman explained.

The number of complaints about tax audits also increased, with 56 received, he added.

At the same time, 15% of the total number of all complaints came against law enforcement agencies, including the National Police – 42, the prosecutor’s office – 26, and the SBU – nine. At the same time, 21 complaints were received against the tax police, which are in a state of liquidation in connection with the launch of the Bureau of Economic Security.

Another 6% of complaints were received against state regulators (AMCU, the State Architectural and Construction Inspectorate, NEURC, the State Service for Geodesy, Cartography and Cadastre), 4% – complaints against local authorities.

According to Swiecicki, 73% of complaints came from small and medium-sized businesses. Ukrainian companies submitted 87% of complaints, companies with foreign investments – 13%.

"For the first time, Kyiv and Kyiv region filed less than 40% of complaints, that is, other regions of Ukraine began to contact us more often than before," the business ombudsman noted.