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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Will IT industry receive priority?

Ivan Pietukhov: “The law signed by the president lets the considerable part of the industry leave the underground economy”
7 August, 2012 - 00:00
Photo by Ruslan KANIUKA, The Day

The president of Ukraine has finally signed one of the two do­cu­ments granting tax incentives to the IT sector. Starting from the next year, the IT business is given the VAT exemption for ope­rations with soft­ware products. There also will be no unscheduled tax inspections of the IT industry en­terprises and no need to obtain opinion of the State Agency for Science, Innovation and Infor­mation to qualify for the special tax treat­ment. What do the IT market re­pre­sentatives expect from the new law and its amendments? What is their vision of the further de­velop­ment of the industry? The Day asked president of the Adamant Company Group, vice president for IT of the Ukrainian Union of In­du­strialists and Entre­pre­neurs, mem­ber of the Internet Association of Ukraine Ivan PIETU­KHOV to answer these ques­tions.

What is your opinion on the law signed by the president? Were all the important points taken into consideration? Are you satisfied with the law?

“I want to start with saying that Ukrainians are our country’s the most valuable resource, in particular, our young specialists. They are intelligent, talented, and successful. International experience shows that Ukrai­nian professionals are devoted to performing their job duties excellently in any sphere, especially when it comes to engineering and exact sciences.

“The IT industry is not an exception. That is why during the last few years I have been lobbying the crea­tion of distinct state priorities in the matter of IT branch development. I think this branch has to possess one of the top priorities of development in Ukraine. In general, the law is directed at improvement of the overall state of the information technology industry. That is why the whole business environment, including me, appreciates this law positively.

“This is the first step to increasing the priority of the IT industry development. No matter how big or small this step is, it is a step forward which has finally been made. And we welcome that the president has signed this law.”

Earlier you used to oppose incentives, but they are included in this law.

“There is a difference between incentives and priority development. Incentives, tax privileges, VAT exemptions are the compounds of the priority development. It should be understood that this is not for one day only, not even for a year, and not for just one certain company, but for the whole industry. This is a systemic approach.”

Which further steps do you think are necessary for granting the highest prio­rity of development to the IT industry in Ukraine?

“The next step in IT industry development is the creation and adoption of the ‘Strategy for Information Society Deve­lopment until the Year 2020.’ At the pre­sent time it is being created by the Cabinet of Ministers of Ukraine working group, which is headed by Volodymyr Semynozhenko. I participate in the process of its creation as well. This document is almost ready and is at the endorsement stage, after which it will be submitted to the go­vernment’s consideration. We hope that this strategy will be supported by the Cabinet of Ministers and signed by the head of state.”

It is said that after this law comes into force, the IT industry’s growth will receive an enormous boost and leave the shadow economy. Do you share this opi­nion?

“The law signed by the president lets the considerable part of the industry leave the underground economy and start working legally. But are the entrepreneurs going to use this opportunity? This is a decision each businessman has to make himself.

“I do not believe in magic wands. One document cannot solve all the problems of the industry. Such wonders do not exist. The problems that have been building up can only be solved gradually, with the rules of the game being changed and improved step by step. Only systemic approach to solving the problems within the IT industry will be a signal for Ukrainian and foreign business that this sector finally gains priority in Ukraine. At this moment our country is working on it.

“The law signed by the head of state is going to benefit the whole information technology sector, though it is aimed at the improvement of a specific branch of the IT industry: software production. But there are other branches, the stimulation of which is essential for the successful development of the whole IT sphere. I am talking about electronic business and telecommunications. Information is blood and wires are vessels. If there are no vessels, blood has nowhere to flow. This is proven by the latest statistics data on the Internet accessibility in Ukraine: in 2011 it increased by 11 percent. During the first six months of the last year, the growth was equal to 5.5 percent, and during the same period in 2012 it increased by three percent only. So, we can see that the process is in decline right now. This is caused by the problems with the access to telecommunications infrastructure in buildings. So, we can see that the problems exist, and they require a complex solution. The latter can be found only after development of the IT industry becomes one of the priorities in Ukraine, and this can be implemented with the help of the ‘Strategy for Information Society Development until the Year 2020.’ At first, this strategy should be approved, and then Ukrainian legislation should be harmonized in accordance with the prio­rities defined in the strategy.”

As far as I understand, solving the telecommunications infrastructure problems is one of the amendments that you plan to make in the second law that was not yet signed by the president?

“That is correct. We are very patient and are ready to wait until everyone is sa­tisfied with the document. The most important thing is that the final version of the law will benefit the industry. And I am sure that the law will receive enough support to be passed and signed. Because today all the problems of the IT industry are revealed, analyzed, and the right decisions are made on the presidential level. This signifies that an integrated approach to the IT sector problems solving has appeared.”

Interviewed by Natalia BILOUSOVA, The Day