In the modern Ukrainian economy, a paradoxical situation has emerged: companies operating in the "white" sector and paying taxes have found themselves in a high-risk zone. As it turns out, business transparency can today become a vulnerability, while shadow schemes often remain unnoticed by regulatory authorities.

This alarming trend was voiced by Anna Derevyanko, Executive Director of the European Business Association (EBA), in an interview with RBC-Ukraine. The expert emphasized that the weakness of state institutions creates an imbalance where conscientious entrepreneurs become easy targets for inspections.

Why "White" Business is Under the Gun

The logic of the system is simple and cruel: the operations of transparent companies are easy to track. Unlike them, businesses using "gray" schemes often have the means to avoid liability or remain unnoticed by inspectors. Derevyanko notes that while human nature tends to look for loopholes, in countries with strong institutions, such as Switzerland or Poland, mass abuses are simply impossible.

When state mechanisms fail to do their job, it becomes easier for businesses to bribe their way out than to pay taxes honestly. According to the expert, the problem lies not in a lack of legislation, but in the state's systemic inability to ensure the rule of law.

The Shadow Economy as a Consequence of Systemic Failure

The situation is exacerbated by the fact that transparent business finds itself at a disadvantage compared to shadow players. Anna Derevyanko summarizes: "If institutions do not do their job properly — we see a shadow economy that thrives. Then it is more logical not to pay taxes than to pay them, because it is easier to bribe".

As a result, honest business, which is in plain sight, becomes an easier target for inspections than the shadow sector, which skillfully hides its activities.

What EBA Experts Propose

To rectify the situation, the European Business Association proposes not creating new laws, but rooting out injustice at the foundation level. Key areas of reform include:

  • Reforming the judicial system;
  • Ensuring the real rule of law;
  • Establishing proper, impartial control by law enforcement agencies.

"Instead of constantly creating new laws, the state must learn to control the implementation of existing ones. Only then will honest business cease to be an easy target," Derevyanko emphasized.

Previously, EBA has repeatedly drawn the attention of authorities to this problem, calling for systemic changes that would create a level playing field for all market participants.

Economic Context

It is important to note that transparent business plays a key role in filling the budget. Recently, the Minister of Economy, Alexey Sobolev, stated in an interview with RBC-Ukraine that enterprises with reserved workers provide about 60% of tax revenues to the budget. This highlights the importance of protecting precisely that sector which is currently under attack due to institutional weakness.

Read more about the state of the Ukrainian economy, the effectiveness of the worker reservation system, and the government's plans to support business and the labor market in the RBC-Ukraine article.