Business Update – March 18: Business wants more protection from COVID-19 downturn

The COVID-19 economic relief bill passed by the Ukrainian parliament on March 17 is being called into question. Emergency measures have been designed to ease the strain on businesses and workers during the nationwide COVID-19 quarantine, but some are questioning how effective the new laws will be.

Some legal experts say that the bill, which places a moratorium on some taxes and social contributions and was passed by the Rada on March 17, may have a limited impact on businesses. The tax breaks do not go far enough to have the effect the government intended. Some virus-stricken countries in Europe have implemented robust measures to protect their economy and workers during the COVID-19 downturn, including rent and mortgage holidays, tax breaks, paid sick leave and compensation payments.

An entrepreneurs union also stated that businesses in Ukraine need more, and that the government’s Affordable Loans program (known as 5-7-9%) needed to be expanded to all businesses, not only startups. The union also insisted on tax holidays to mitigate the effects of a COVID-19 economic downturn. The laws adopted so far on supporting businesses during the period of quarantine are not enough, according to Kateryna Hlazkova, executive director of the Union of Ukrainian Entrepreneurs.

She told Interfax-Ukraine: “For now, these are half measures. We have done a survey in the Union over the past few days about what measures the business expects. So, 65% said it would be important to introduce tax holidays, namely to cancel or defer the payment of single social security tax and personal income tax for everyone during the quarantine.”

Uber Eats is providing free delivery of food in Kyiv, Odesa, Lviv, and Kharkiv until March 31, the company has said amid the closure of cafes, bars and restaurants. Eateries continue to deliver food, even if they can’t host their customers. Uber Eats has also reminded customers that contactless payment for delivery is a safer option than cash. “We are also looking for additional ways that Uber and Uber Eats can… support the community in these difficult times,” the company stated. 

The economy ministry, producers and pharmacies will create a response team to ensure the continued provision of personal protection goods for Ukrainians, the Economy Ministry of Ukraine has stated, according to Interfax-Ukraine. Around the country, there have been complaints about shortages of medical masks, sanitizers, and other sanitary goods. 

Ukrainian Prime Minister Denys Shmyhal said negotiations with the International Monetary Fund (IMF) are advancing, and expressed hope for a quick positive outcome. “Yesterday and daily, the negotiations are held with the IMF in a conference call mode,” he said, in a briefing reported by Ukrainian language media. “We are moving forward regarding financial support… There are corresponding instructions for the finance minister. We hope for a positive outcome in the near future.”

TV and movie streaming service Megogo has seen usage grow by 22% compared to last week. “Over the past few days, the number of new users has increased slightly… We also noticed that existing users began to watch the service longer and longer,” a Megogog spokesperson said in a statement. 

Myronivsky Hliboprodukt (MHP), an agricultural holding specializing in poultry and eggs, has said that a decline in MHP shares does not affect its operations, Interfax-Ukraine reported. The group also said on its website that the global economy is in turbulence and affecting all companies, namely the U.S. market declines and the fall of stock indices in Asia and Europe, the group said.

The government has plans to evacuate Ukrainian tourists from Egypt, the UAE, Dominican Republic, and other resorts, President Volodymyr Zelensky has said. “The state provides maximum assistance to tour operators and carriers to return Ukrainian tourists from remote corners of the world.” 

Nearly 86,500 people crossed Ukraine’s state border on March 15–16, state border officials have said, either entering or exiting the country. Some medical experts have warned that people without symptoms might be driving the spread of coronavirus as they travel.

Source: www.kyivpost.com