"It looks like a direct expropriation." Conversation with the director of the IT Ukraine Association about the high-profile currency policy of the NBU

On May 20, 2022, the National Bank of Ukraine, by its resolution, actually allowed banks to buy foreign currency at a fixed exchange rate (UAH 29.25 per dollar), and sell it at the market rate (~UAH 37 per dollar).

This decision caused a heated discussion among the Ukrainian IT community, many employees of which are registered as fops and receive dollar receipts that can be converted to Hryvnia only at the NBU exchange rate, so due to innovations, they will lose part of their funds during currency transactions.

DOU spoke with the director of the IT Ukraine Association Konstantin Vasyuk about this situation and the consequences of the relevant decision of the NBU.

- The NBU de facto allowed banks to buy foreign currency at a fixed exchange rate, and sell it to customers at the market rate, and due to the significant difference between them, an "additional tax"actually arises for export industries, in particular IT. How did your association take this news?

This is not an" additional tax", it looks like a direct expropriation of part of the profit. Its volume is approximately 26%. We have a war in our country, so let's call a spade a spade. War is not a" special operation"; just as this decision is not an" additional tax", but expropriation from citizens.

If a person, for example, went abroad with 50 thousand hryvnias in a card account and pays in the euro area, today he loses 26% of this amount. This is a direct economic consequence, but there are many other factors that we cannot calculate now, but we can make a forecast that will also be negative and pessimistic.

First of all, this concerns the specifics of export industries, which currently have restrictions. The meaning of introducing multiple, dual courses exists and, by the way, the NBU successfully applied it in the first month of a full-scale war. Then they created a fuse against panic moods.

But today we see that there are no economic prerequisites for a cascading growth of the exchange rate. Question one: is it advisable to continue using dual courses — especially with such a gap? Secondly, let's look at the math: the possible consequences of such a decision are that companies will be forced to reduce the payment of foreign currency funds to Ukraine.

The IT industry is primarily about people, wages, and talent. And today, a person who faces such a problem is not interested in losing almost 30% of their income, so they will look for opportunities not to keep accounts in Ukraine. And those Ukrainians who are temporarily located outside the territory of Ukraine will think about obtaining tax residency in order to freely dispose of honestly earned foreign currency funds, from which they honestly pay taxes.

War is not a "special operation", just as this decision is not an "additional tax"

In other words, we may lose foreign exchange earnings, and we received $2 billion from the IT industry in the first quarter of 2022. In February alone, the country received 8 839 million, and in March—. 522 million. Please note that almost 30% of them will be purchased by someone as a beneficiary. And in general-Why do this?

- Have you already found the answer to this question?

In fact, we are not looking for an answer to why we did this, but for a solution to prevent possible negative consequences. We are at a crossroads. The point of no return can be passed in a month, when people simply decide to say goodbye to their accounts in Ukrainian banks and Ukrainian tax residency. And this is the first step towards saying goodbye to Ukrainian citizenship. Because it's strange to see the state behave like this towards you at critical moments.

Let's be honest, we are the only export industry operating at the pre-war level. This is just incredible, we are proud of it and tell all our partners and our clients. What do we tell them now? What did the state do to us -30% of our revenues?

And another important aspect, which is important to mention given the war: 800 million hryvnias, according to our report, it residents sent to the needs of the Armed Forces of Ukraine and charity. They took these funds from their income. Now they have taken away about 30%, which they could have spent for this purpose. So, does our army no longer need help?

- What do IT companies tell you about this decision of the NBU? After all, this directly affects their specialists, who will lose money.

Our industry has a clear position: we will correct this situation while it can still be done. After all, it is critical if this is not done within the next month. Probably, companies will hold back compensation payments for now and see if the issue is being resolved. But if the state doesn't, we won't see валют 522 million in foreign exchange earnings next month.

Businesses will find legal ways to pay for the work of their specialists both in Ukraine and abroad. At some point, the level of trust in the state increased. And now we risk losing it again. And trust is built up over the years.

Therefore, it is necessary to establish a exchange rate regime that takes into account the interests of export industries, and return to a floating exchange rate. By the way, we have already sent relevant proposals to both the Office of the president and the head of the National Bank.

And if you want to create dual exchange rates, then you should allow part of the foreign exchange earnings to be sold at the commercial rate, and the rest — at the official one. Now there were no complaints that the banks have a rate of 32 Hryvnia per dollar, and the official rate of the NBU is 29 Hryvnia. But from now on it will be 37 for a dollar — and this is too much. Therefore, it is necessary to make this "corridor" between the exchange rates and allow you to sell at the commercial rate, for example, 50% of foreign currency earnings, and 50% — at the exchange rate of the National Bank.

The point of no return can be passed within a month

Finally, it is important to provide the possibility of card payments and cash withdrawals abroad at the official exchange rate in the equivalent required for banal life support — for example, $2000. Because when you live in the European Union, you pay $1,000 for housing, a separate amount for school, and so on. So give people the opportunity to do it.

And all stories about "card tourism" are solved in the offices of banks, which can simply look at the Tin, who withdrew how much currency in a month, and not at the NBU level.

- If this situation is resolved in the near future, what lessons can banks and the IT industry learn from it?

Our companies are constantly developing business continuity plans-we have already passed the beginning of the war, and the industry has shown its resilience. Conclusions should mostly be drawn not by us, but by the state. We will survive and always find a way out, because we are more flexible than the state, but we are its allies. And we want the government to seek at least advice from us and professional economists before taking such steps. We don't want to teach the state — just help it.