StrategEast held presentation of the Diia City Project for international institutions
StrategEast president Anatoly Motkin moderated the presentation of a special legal framework for the Ukrainian IT sector “the Diia City Project” for international institutions.
Diia City, a special legal framework for the Ukrainian IT sector, aims to better realign incentives towards supporting the process of moving up the value chain. Tabled by the Ministry of Digital Transformation of Ukraine, the reforms aim:
– to simplify the tax system;
– to provide incentives for resident firms to achieve scale, invest and increase formal employment;
– to attract FDI;
– to strengthen governance and improving the business operating environment;
– and provide a more equitable playing field across industry participants.
Faced with a precarious fiscal outlook, IMF concerns centre around a potential decline in government tax revenues following implementation of the reforms. Modelling, undertaken by Oxford Economics, suggests that Diia City reforms will have a modest impact on government finances, confirms there is little-to-no risk of budget revenue loss, and strong probability of boost tax revenues under the right circumstances.
The main conclusions of Oxford Economics’s report “A Review of the Impact of Reforms on the Ukrainian IT Sector” worked out in collaboration with International Tax and Investment Center and StrategEast Center for New Economy were presented during online event.
Presentations were made by Oliver Salmon, Oxford Economics and Daniel A. Witt, International Tax and Investment Center, President. On behalf of Ukrainian authorities, the discussion was attended by Oleksandr Bornyakov, Deputy Minister of Digital Transformation of Ukraine Olga Magaletska, Head of the Office of the National Investment Council of Ukraine.
Representatives of USAID Mission in Ukraine, the World Bank; EBRD; UK Embassy in Ukraine; US Embassy in Ukraine attended the presentation and took part in the discussion.
