A representative forum was held in the capital to discuss current issues and prospects for the development of micro, small, and medium-sized businesses under martial law. The event was organized as part of the Swiss-Ukrainian project “Strengthening Member Business Associations of Micro, Small and Medium-Sized Enterprises in Ukraine,” which is being implemented by the United Nations Development Program (UNDP) in Ukraine in cooperation with the Ministry of Economy of Ukraine and with financial support from Switzerland.

The forum brought together representatives of the government, international partners, business associations, and experts for a constructive dialogue on creating favorable conditions for the development of entrepreneurship in Ukraine.

The event was organized by the Ukrainian Business Council, the largest horizontal association comprising 126 all-Ukrainian associations, in cooperation with UNDP. The aim of the forum was to develop specific recommendations for the implementation of the Strategy for the Recovery of Ukraine, Sustainable Development and Digital Transformation of Small and Medium-sized Enterprises for the period up to 2027, as well as other proposals for the recovery and simplification of doing business in Ukraine. The event was moderated by Dmytro Tuzov, host of Radio NV.

Oleksandr Tsybort, Deputy Minister of Economy of Ukraine for Digital Development, Digital Transformation, and Digitalization, opened the forum by emphasizing the key role of small and medium-sized businesses as the foundation of Ukraine’s economy, the driving force behind innovation, and job creation. At the same time, he acknowledged the numerous challenges facing the sector: regulatory barriers, limited access to finance, and the need to adapt to global market trends. The Deputy Minister stressed the importance of digital tools to facilitate business and deregulation measures, which are already being actively implemented.

Irene Frey, Deputy Head of Private Sector Development, State Secretariat for Economic Affairs (SECO), highlighted the long-term support her country has provided to Ukraine since the 1990s, with a particular focus on small and medium-sized enterprises. Irene Frey stressed the importance of public-private dialogue as a constructive mechanism for creating an enabling business environment. She noted that the program is already in its third phase of implementation and that the key task is to institutionalize public-private partnerships.

“Only on the basis of trust and long-term communication between two partners, when both sides actively build trust, does policy become more practical, better coordinated, and responsive to business realities,” emphasized the Swiss representative.

Christophoros Politis, Deputy Permanent Representative of UNDP in Ukraine, stressed the importance of the private sector’s voice in shaping SME support policies both in Kyiv and throughout Ukraine. Christophoros Politis highlighted the project’s philosophy, which is to expand the capacity of business organizations and create a platform for open dialogue with the government.

He drew attention to the critical importance of access to financing and noted that Ukraine’s accession to the EU should be accompanied by active dialogue. In his opinion, this approach will allow for the development of an export-oriented private sector capable of operating in the EU market.

The moderator of the event, Dmytro Tuzov, gave the floor to Grigol Katamadze, who recalled the history of the creation of the UBA, noting: “…once upon a time, several associations decided to unite in order to preserve their subjectivity, and today’s leading business associations, to consolidate business and implement socially important reforms. The UBA consists of 125 associations,” Grigol Katamadze emphasized.

Grigol Katamadze also thanked foreign partners who participated in today’s event for the idea of creating a wider circle of business associations and economic analytical centers, expressing hope that, based on the results of today’s event, a resolution of the united Ukrainian small and medium-sized business on key priorities for overcoming the threats currently facing Ukraine will be adopted, primarily the need to implement the tasks identified by leading business associations.

Grigol Katamadze, addressing Olena Shulyak, emphasized that he opposes the adoption of laws that “divide” society and asked about the restoration of open competitions for civil service positions with only Ukrainian experts participating in the competition commissions.

The chair of the Servant of the People party, Olena Shulyak, replied to Grigol Katamadze that Bill No. 13478-1 of July 16, 2025, initiated by the committee she heads, provides for the phased restoration of competitions for civil service positions, first for category “A” positions, then ‘B’ and “C” positions, covering positions in local government bodies and regulating the procedure for conducting competitions for those who were appointed without them during martial law.

Business Ombudsman Roman Vashchuk drew the participants’ attention to an important issue: despite the benefits of dialogue between the authorities and business, the state has other instruments at its disposal – law enforcement and fiscal authorities, where communication takes place in a completely different way. Roman Vashchuk stressed that until one dialogue is synchronized with the other, many good intentions will not be realized.

He noted certain improvements in the work of the State Tax Service and the Economic Security Bureau, but emphasized the problem of “a vertical structure that seeks to create fear and dependence.”

“A state where officials work under the pressure of fear and businesses are kept on a leash is a system that must be restrained. Otherwise, it will not allow even the most constructive initiatives to be implemented,” the ombudsman said.

ANALYTICAL RESEARCH AND KEY CHALLENGES

Maksym Boroda, UNDP Project Manager in Ukraine, presented the results of an annual study on the impact of the war on micro, small, and medium-sized businesses, which UNDP has been supporting for the third consecutive year. According to him, the situation with the volume of work for entrepreneurs is “50-50”: half of businesses are not experiencing a decline, but for the other half, things are not so good. An alarming sign is that the share of entrepreneurs with significant growth in the volume of work has more than halved, from 21% in 2023 to 4% this year. Only 17% of entrepreneurs assess the financial and economic condition of their businesses as good or excellent.

Maksym Boroda named the top five challenges for SMEs:

• the difficulty of predicting the state’s economic policy (56%),
• access to markets and effective demand (54%),
• the unpredictability of the economic situation (53%),
• access to human resources (52%),
• access to financing (40%).

Oleksandr Tsybort reported on the initial results of implementing the SME Recovery Strategy until 2027. According to him, 18 of the 86 measures of the strategy have already been implemented, and 55 are in the process of implementation. Key achievements include a significant update to the “Own Business” program, which now includes microgrants of UAH 75,000 without the requirement to create jobs, an expanded list of authorized banks, and the ability to change the intended use.

“More than 500 young entrepreneurs have received grants, and nearly 6,000 businesses have opened in frontline territories, creating 10,000 jobs,” said Tsybort.

He paid special attention to the new digital tool “Pulse,” which has already received over 300,000 ratings from businesses and 20,000 comments and requests, allowing problems to be systematized using artificial intelligence.

Oleg Getman, coordinator of the expert groups of the Economic Expert Platform, member of the Supervisory Board of the Ukrainian Business Council, thanked the Ministry of Economy for its inclusive approach to developing the SME-2027 Strategy with the involvement of think tanks and business associations.

At the same time, he drew attention to the problem: the vast majority of critical systemic proposals were included in the Strategy, but about a dozen key points are missing from the Strategic Plan, so it is unclear when and how they will be implemented. These priorities include: an annual study of the bureaucratic burden on SMEs, reforming the state supervision system, de-shadowing self-employed persons, improving the public procurement system, and strengthening the capacity of the business support infrastructure.

Getman also presented the results of an aggregate analysis of several studies (BRDO, UNDP, Institute for Economic Research), which identified the biggest problems for SMEs:

• labor shortages,
• declining demand and loss of customers,
• unfair competition and the shadow economy,
• unjustified inspections and fines,
• logistical and infrastructure challenges.

Volodymyr Dubrovsky, expert at CASE Ukraine, Economic Expert Platform, presented the results of a recently completed study of shadow schemes in the Ukrainian economy, conducted with the assistance of UNDP Ukraine and financial support from the Swiss government as part of the Swiss-Ukrainian project “Strengthening Member Business Associations of Micro, Small and Medium-sized Enterprises in Ukraine.” According to his data, the two largest schemes continue to dominate and grow: envelope wages (completely unregistered employment and minimum wage + envelope), as well as “gray imports” and smuggling. The budget losses from these two schemes alone amount to about 400 billion hryvnia. If we take into account all the schemes that have been calculated, the losses reach 500-600 billion hryvnia, and according to a balanced estimate of the shadow economy (30%), about one trillion hryvnia annually.

Hanna Strykun, Chairwoman of the National SME Platform and Ambassador of the Alliance of Business Organizations, presented the newly created Alliance of Member Business Associations, which brings together 17 platforms and includes more than 450 member business associations throughout Ukraine. The purpose of creating the Alliance is to establish a permanent mechanism for public-private dialogue and strengthen the role of MSME business associations in shaping public policy. The main functions of the Alliance are to establish a mechanism for monitoring the implementation of the SME strategy, provide feedback from businesses, prepare regular reports, and cooperate in the development of relevant legislative decisions, etc.

Strykun emphasized that the association was created on the basis of a voluntary standard of activity developed by the National SME Platform, and called on the authorities to pay attention to who represents business at dialogue events.

It is now quite obvious that the conditions for doing business in frontline territories differ significantly from those in other regions, so special support tools are needed.

At the forum, Oleksandr Chumak, president of the Association of Private Employers, outlined the main strategic priorities for supporting business in frontline territories:

Strategic priority 1. Financial instruments: cheap (preferential) loans; grants for restoring and preserving jobs; grants for infrastructure sustainability.

Strategic priority 2. Insurance against military risks: compensation for the cost of policies; compensation for direct losses (damage, destruction, destruction); compensation for indirect losses (lost profits, salaries for the period of restoration, demining).

Strategic priority 3. Tax and regulatory instruments: tax preferences (local taxes, personal income tax, social security contributions, VAT, income tax); total deregulation; reduction of administrative burden (moratorium on inspections).

Strategic priority 4. Preservation of human capital: retraining/education (veterans, IDPs); relocation/housing compensation; 100% staff retention (including sole proprietors); compensation for first job and internship.

Specific measures that need to be implemented include:

• State guarantees and compensation for loan interest rates
• Grants for restoring and preserving jobs (including for retaining staff during the recovery period of affected enterprises)
• State insurance against military risks, covering direct and indirect losses
• Introduction of tax breaks on local taxes.
• Provision of grants “Own business: recovery” to eliminate the consequences of the war for affected micro and small enterprises and increase the grant amount to UAH 1.5 million.
• Provision of compensation for workforce relocation (moving, housing)
• Introduction of 100% staff reservation, including for sole proprietors.

PUBLIC INTERVIEW WITH THE HEAD OF THE TAX COMMITTEE OF THE VERKHOVNA RADA

The central event of the forum was a public interview with Danylo Getmantsev. The Chairman of the Tax Committee of the Verkhovna Rada took part in a frank conversation about the most pressing issues of tax, customs, and financial policy.

• On corruption and the shadow economy: Getmantsev categorically stated that corruption and the shadow economy are not two related phenomena, but “one absolute phenomenon that we simply view from two sides.” He refuted the illusion that there is some wonderful solution that will instantly overcome these problems. According to him, Ukraine already has sufficient mechanisms and regulations to bring the economy out of the shadows to the level of European countries—all that is lacking is the will to apply them.
• Regarding the register of drops and the work of financial monitoring: Danylo Getmantsev noted that this is only a tool that will not solve anything on its own. “It seems to me that today there are already sufficient powers in the hands of law enforcement and fiscal authorities, and financial monitoring is the most important thing in order to block such operations,” he stressed. The committee chairman expressed dissatisfaction with the work of the Financial Monitoring Service and called on the National Bank to be more bold in law enforcement.
• About digital platforms and taxis: The head of the tax committee explained that only those platforms that perform an intermediary function for money, receive a percentage of sales, and have information about transactions will be tax agents. Simple bulletin boards (Facebook, Instagram, OLX bulletin board) are not such taxpayers. He stressed that attempts to “fragment” or spread out across different platforms in order to evade taxation will not succeed, so “it will be easier to just go with the fact that in the end, this 5% plus 5% tax will be withheld immediately and everyone will be better off for it.”
• On envelope wages: Recognizing envelope wages as the most difficult problem to combat, Danylo stated that a comprehensive solution is only possible after the end of the war through a complete reform of the taxation of the wage fund. Currently, wages below the industry average will be a sign for tax control and a reason to classify the enterprise as risky.
• On tax breaks: The committee chair confirmed his consistent position as an opponent of tax breaks: “Any tax break is a distortion and distortion of competition that gives one business an advantage over another.” He recalled that his Tax Committee had removed the largest number of privileges in history, from enterprises employing people with disabilities to “chicken meat.” In his opinion, the only justification for privileges could be critical necessity, as in the case of equipment for the production of weapons or drones.

QUESTIONS FROM BUSINESS

During the forum, representatives of various sectors of the economy had the opportunity to ask their questions directly to the head of the tax committee. Andriy Antonyuk, chairman of the board of the All-Ukrainian Taxi Association, described a situation where most of the taxi industry operates in the shadows, while legal businesses are at a significant disadvantage. He also drew attention to the problem of commission-based car sales, where “every company near the MREO has a turnover of at least one million euros per day,” while having one director, zero employees, and zero taxation. Danylo Getmantsev agreed with the problem and emphasized that the draft law on platforms is a compromise solution for the taxi industry.

Andriy Khorka, representative of the international passenger transport company KL Airbus, raised the issue of illegal carriers in eight-seater minibuses, which create unfair competition for legal businesses. He asked about the fate of bill No. 11025, which grants additional powers to regulatory authorities. D. Getmantsev replied that increasing responsibility would not help where even the current system is not working, and suggested discussing this issue separately in order to develop a systematic approach to improving the industry.

Oleksandr Baldynyuk, president of the Ukrkondprom Association, raised the issue of documentary checks in cases where the tax service does not specify which documents were not submitted in full. Getmantsev replied that this is a matter of specific law enforcement, which must be resolved through administrative complaints or court proceedings in each individual case.

Tetyana Potopalskaya, a leading tax specialist and member of the Public Council at the State Tax Service, raised the issue of reviewing tax breaks and a new tax break for electric cars. Getmantsev confirmed that he remains opposed to such an instrument of economic regulation, as tax breaks distort competition and their consequences are difficult to predict.

CONCLUSIONS AND PROSPECTS

The “Dialogue between Government and Business” forum demonstrated the maturity of the Ukrainian business environment and its readiness to cooperate constructively with the government even under martial law. The participants reached a consensus on key issues that require immediate resolution:

• De-shadowing of the economy – the biggest challenge, which requires not so much new regulations as systematic enforcement of existing mechanisms
• Labor shortage – with 4 million IDPs, most of whom are unemployed
• Bureaucratic burden – the need for annual independent studies and systematic deregulation
• Access to financing – despite the existence of support programs, the mechanisms for obtaining them need to be simplified
• Institutionalization of public-private dialogue – through the creation of an alliance of business associations and regular platforms for communication

Based on the results of the forum, a resolution with specific recommendations for economic recovery and development is planned to be prepared. As moderator Dmytro Tuzov noted, the most valuable resources are people and time, and the forum demonstrated that Ukrainian business is ready to effectively use both of these resources to build the country’s economy even in the most difficult conditions.