Economy ministry to table bill to reopen 2 free economic zones in Lviv Oblast

April21200922:03

According to The Ukrayinska Pravda Apr. 21 report, in response to the pressure from Lviv local authorities the economy ministry of Ukraine has drawn up a bill reinstating 2 FEZ awarding tax breaks to investors.

Two FEZs were launched in the Lviv oblast in 1999, in Yavoriv and Truskavets. Since their start, tax payments in the budget amounted to hryvnia 330 million, with the state awarding 30% in tax breaks to businesses.

The creation of both free economic zones allowed to employ 6,000 workers, says Volodymyr Hubytsky, head of the economy department at the Lviv oblast administration.

“When FEZs were cancelled in 2006, it had a significant negative impact on the oblast economy,” the official admitted.

Given the ongoing recession, the reinstatement of tax breaks for investors in FEZs will attract new investments. Tax breaks can be offered not only to companies operating within the FEZs, but to separate important projects outside FEZs as well, Lviv officials say.

Not all of Ukraine’s 10 FEZs were effective, serving rather as loopholes for unscrupulous businessmen to funnel their profits abroad, V. Hubytsky continues, adding that it is important to analyze their past economic record before reopening them.

For instance, the Lviv FEZs attracted nearly 50% of the total investments in all Ukrainian FEZs, the official pointed out.