Rada approves funds for business suffering from lockdown

Ukraine’s parliament voted on Dec. 4 to adopt a
compensation package of up to UAH 8,000 (USD 283) per small business that lost
income from the November lockdown measures imposed by the government. It is
available to those individual entrepreneurs who had their business open as of three
months ago, paid the social security tax, had not liquidated their official
status, and were not employed in a separate firm. The funds also apply to those
employers who had to dismiss workers who were officially employed in the third
quarter. Many of the qualifying businesses are from the service sector.

The compensation will be paid from the special budget
fund to combat the consequences of the COVID-19 disease. MP Roksolana Pidlasa
estimated that the budget outlays related to the compensation might reach UAH
14.6 bln (USD 0.5 bln).

Alexander Paraschiy: It is not
clear at this stage whether entrepreneurs will be able to count on any
compensation, taking into account that Ukraine’s cabinet has cancelled any
strict lockdown measures for December. Also, it is not clear whether the state
budget, whose planned deficit has been financed by about 1/3 year-to-date, will
be able to finance all the earmarked compensation. In any case, we expect that
total compensation for the measures limiting business activity will be
ultimately much less than lawmakers estimate, meaning the adopted legislation
is more of a PR move to create the impression that the government is doing all
its best to protect affected business.