The equity contribution in Ukraine, as it currently exists, is ineffective, generates high corruption risks, and most importantly, does not fulfill its main function - the development of engineering and transport and the construction of a new social infrastructure of settlements. Its complete abolition in Ukraine contributes to the improvement of the business environment, which, in turn, will allow the country to rise in the Ease of Doing Business Rank in the Dealing with Construction Permits rating.
Deputy Minister of Regional Development, Construction, Housing and Communal Services of Ukraine Lev Partskhaladze expressed his opinion.
"Today, the amount of the share in infrastructure development is calculated on the basis of the total estimated cost of construction of the object, which is determined in line with construction norms, state standards and rules. For non-residential buildings and structures, the maximum size of it is 10%, for housing facilities - 4%. But in fact, the share of equity participation in local budget revenues is rather small (about 1%), and these funds are not being spent on the construction of new kindergartens, schools and other infrastructure. In addition, the targeted use of these funds is not controlled by any authority, therefore, the share, in essence, has become a "legalized bribe of developers" and generates high corruption risks from local governments. Today the regions have strong financial support in the framework of decentralization, and local budgets are growing. Therefore, equity participation in the form it is now, has long been outdated and needs to be canceled", the Deputy Minister said.
According to expert estimates, the complete cancellation of share participation throughout Ukraine will contribute to improving investment appeal and will make corrupt manifestations in the construction sector impossible and get into TOP-20 Doing Business in the Dealing with Construction Permits rating.
Now Ukraine is one of the leaders in the Doing Business growth rate among 190 countries. In the overall rating, our country ranks 71st, while in the rank Dealing with Construction Permits in 2 years we have improved the position from 140th to 30th.
According to experts from the World Bank, one point in the overall Doing Business ranking gives an opportunity to attract around $ 600 million in the economy of the country.
The Doing Business ranking characterizes the state of the investment climate in 190 countries around the world. This is the result of an annual study that assesses the ease of doing business. The World Bank has calculated this index since 2003 according to criteria such as the ease of starting a new business, obtaining construction permits, registering property, getting credit, protecting minority investors, paying taxes, etc.