Kyiv hosted the forum “Reconstruction of Ukraine: Quality Institutions and Economic Security,” organized by the National Business Coalition of the MMB, the Ukrainian Business Council, and the Association of Frontline Cities and Communities, with the support of the Center for International Private Enterprise (CIPE). The key topics were support for the economy of frontline regions and preservation of the simplified taxation system.

The Economic Expert Platform acted as an analytical partner. FinClub, Interfax, Tsina Derzhavy, and Den acted as information partners.

Volodymyr Dubrovsky, senior economist at CASE-Ukraine, presented the findings of a study of global experience in solving the problem of the fragmentation of large businesses into sole proprietorships. According to his estimates, fragmentation schemes lead to 12-14 billion hryvnia in lost budget revenue, which is significantly less than unregistered labor and “gray imports.”

Experts analyzed international experience (Kazakhstan, Romania, Great Britain, Italy, UAE) and proposed specific criteria for identifying pseudo-franchises and pseudo-platforms: use of a single IP address, lack of a public offer, shared resources and equipment, lack of price competition. Mr. Volodymyr emphasized the need to create an independent commission to determine the criteria for fragmentation with the participation of representatives of the MMB, franchises, and trading platforms.

Galina Tretyakova, chair of the Verkhovna Rada Committee on Social Policy, delivered a speech in defense of small businesses, calling sole proprietors “the heart of the economy” who get up at five in the morning, support their families, and create jobs. She criticized the changes to the simplified system planned in the draft Memorandum: “When we start looking for money, the first thought is, ‘Here they are, small entrepreneurs, we need to squeeze them hard.

Galina emphasized that the Gini coefficient has increased during the war—the rich are getting richer, and the poor are getting poorer. Ms. Galina proposed a systemic solution—the introduction of household taxation based on the European model. According to her, this will allow entrepreneurs to migrate to the legal space without excessive fiscal pressure. The chair of the Verkhovna Rada committee noted that the government lacks political will and called for a change in the composition of the Ministry of Finance and Economy.

Oleksiy Movchan, Deputy Chairman of the Verkhovna Rada Committee on Economic Development, presented three structural reforms to support small and medium-sized businesses.

• The first is a major reform of public procurement with integration into European legislation, which will introduce non-price criteria, dynamic procurement, and centralized procurement organizations to ensure fair competition.
• The second is a reform of the appraisal institution to combat fraud and ensure an objective assessment of investments and war losses.
• The third is a simplified bankruptcy procedure for small businesses (turnover up to UAH 20 million), which will reduce the time from 36 to 3 months, which is especially important for veterans and entrepreneurs affected by the war.

Mr. Movchan criticized the government for certain points in the draft memorandum with the IMF: “Instead of ‘selling’ customs reform to the IMF, the government is making concessions on simplification. There is no need to tell fairy tales about the bad IMF.”

Dmytro Samonenko, Deputy Minister of Finance of Ukraine, explained the complexity of the budget situation: “The revenue side of the state budget amounts to 2.9 trillion in the budget. Expenditures on the security and defense sector amount to 2.8 trillion. There is a 100 billion difference to cover other expenditures (social welfare, education, medicine, and many others).“ He stressed that negotiations with the IMF are a ”bilateral story.”

Ukraine must increase its revenue, reduce its dependence on international aid, and de-shadow the economy and business. The deputy minister noted that “if the state had done everything” to combat the schemes abused by unscrupulous large businesses, “today’s event would not have taken place.” Samonenko agreed that cooperation with business associations and other stakeholders is important for developing criteria for identifying abuses and . He stressed the need to foster a culture of tax compliance: “There are countries where it is shameful not to pay taxes. This culture has been developed over many years, and Ukraine is also working on it.”

Boris Emeldesh, president of the All-Ukrainian Professional Association of Entrepreneurs, sharply criticized the National Revenue Strategy, calling its approach to a simplified system “counterproductive.” He cited telling figures on the shadow economy: “In 2025, the shadow economy will account for 19% of the tobacco market, 16% of the alcohol market, and 21% of the fuel market—every fifth pack of cigarettes and every sixth bottle of alcohol will be illegal.”

Mr. Emeldesh stressed that the simplified system covers about 2.5 million people, including employees, and is an opportunity for people to survive and feel like useful members of society. He called for control to be focused on risky categories of business, where the losses to the state budget are greatest, rather than on “a girl selling ice cream or an old woman selling parsley.” The president of the All-Ukrainian Professional Association of Entrepreneurs proposed to start the reform with bill No. 13507, which defines clear criteria for labor relations and freelancing and will help minimize the “sole proprietorship instead of hiring” scheme.

Oleg Getman, coordinator of the Economic Expert Platform’s expert groups, called for the creation of a project team consisting of representatives from think tanks, ministries, and business associations to conduct expert discussions and analyze the costs and benefits of the ideas proposed in the Memorandum with the IMF. He also spoke about the inappropriateness of the process of forming public policy, which takes place without inclusive discussions and without taking into account the impact on all stakeholders.

Olga Shapoval, executive director of the Kharkiv IT Cluster, drew attention to the specific needs of veterans, who are undergoing retraining en masse and finding employment as self-employed workers. She emphasized that hiring is categorically unsuitable for veterans due to the need for flexible schedules to care for their health.

Ms. Shapoval raised critical questions about the economic feasibility of the proposed changes: has anyone calculated the cost of administering the new rules, the outflow of people into the shadow economy, and the need to increase the state apparatus? “We have a shortage of personnel in all sectors. If you simplify things, you will be able to redirect people from the tax authorities to those categories of taxpayers where it is really possible to obtain greater benefits for the state.”

The forum participants agreed to set up a working group with representatives from the Ministry of Finance, business associations, and think tanks to develop balanced criteria for identifying abuses in the simplified taxation system.

Dmytro Samonenko shared his contact details for further cooperation. Galina Tretyakova called on the business community to actively advocate for the draft law on households and demand that the draft law on the resumption of civil service competitions be put on the agenda of the Verkhovna Rada. She stressed the importance of public control over the voting of deputies. Oleksiy Movchan announced the imminent adoption of reforms in public procurement, valuation, and bankruptcy, which will create fairer conditions for small and medium-sized businesses.

The forum demonstrated the critical need for dialogue between the government and business in finding a balance between the fiscal needs of the state during the war and the preservation of entrepreneurial activity as the basis for Ukraine’s economic stability.