EBA held a round table on the de-shadowing of the security market

03/ 09/ 2025

On 27 August, the European Business Association held a round table discussion entitled “De-Shadowing the Security Market: Challenges and Prospects” with representatives of government authorities and business. The discussion focused on ensuring a level playing field in the private security services market, combating unfair competition, and bringing unscrupulous players out of the shadows.Dmytro Stryzhov, Member of the Supervisory Board of the SHERIFF security holding, noted that the market is essentially “semi-grey”, with annual losses to the state budget from unpaid taxes in the security sector possibly reaching UAH 8–17 billion. He emphasised the need to restore companies’ subjectivity and equal conditions for participation in tenders, where the winners are often players who artificially undercut prices. According to Danylo Getmantsev, Chair of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, over 30% of companies in the security sector declare wages below the minimum, which indicates large-scale tax evasion. “Price dumping in public procurement of security services means wages in envelopes, and consequently unpaid taxes. Therefore, the first step must be the proper administration of this activity by the Tax Service. The second step is the reform of the simplified tax system, as it has now become a way of avoiding taxation for small, medium, and large businesses.” Yaroslav Zheleznyak, First Deputy Chair of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, underlined that one of the practical solutions to tackling the “grey” business could be strengthening control over wage payments and eliminating abuses in public tenders. Vitaliy Matselyukh, Managing Partner of Artius Law Firm, presented a series of recommendations for protecting economic competition in the security sphere, in particular: Adoption of a state methodology for regulating prices for security services. Amendments to the Law of Ukraine “On Public Procurement”, specifically providing for the disqualification of companies from tenders if they submit abnormally low bids for security services. Introduction of mandatory VAT accrual and payment for security services instead of applying the simplified taxation system. Amendments to the Law of Ukraine “On Security Activities” to ensure that licensees comply with labour legislation regarding payment of wages not below the minimum level, and to increase requirements for obtaining and periodically renewing a security activity licence. Bringing security services provided to municipal enterprises in line with the general rules of the security business and introducing transparent tender procurement procedures for such services. Oleg Getman, Coordinator of the Expert Groups of the Economic Expert Platform, presented data on the 30 largest companies in the market, drawing attention to anomalies in the ratio of turnover to taxes paid in the first half of 2025. The European Business Association consistently supports government initiatives aimed at de-shadowing and defends the interests of responsible businesses. For the first time, a high-level professional discussion was initiated specifically on the security services market. Going forward, the EBA proposes that companies continue the discussion and join forces in addressing problematic issues within its Committee on Business Security and Protection.

On 27 August, the European Business Association held a round table discussion entitled “De-Shadowing the Security Market: Challenges and Prospects” with representatives of government authorities and business. The discussion focused on ensuring a level playing field in the private security services market, combating unfair competition, and bringing unscrupulous players out of the shadows.Dmytro Stryzhov, Member of the Supervisory Board of the SHERIFF security holding, noted that the market is essentially “semi-grey”, with annual losses to the state budget from unpaid taxes in the security sector possibly reaching UAH 8–17 billion. He emphasised the need to restore companies’ subjectivity and equal conditions for participation in tenders, where the winners are often players who artificially undercut prices.

According to Danylo Getmantsev, Chair of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, over 30% of companies in the security sector declare wages below the minimum, which indicates large-scale tax evasion.

“Price dumping in public procurement of security services means wages in envelopes, and consequently unpaid taxes. Therefore, the first step must be the proper administration of this activity by the Tax Service. The second step is the reform of the simplified tax system, as it has now become a way of avoiding taxation for small, medium, and large businesses.”

Yaroslav Zheleznyak, First Deputy Chair of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, underlined that one of the practical solutions to tackling the “grey” business could be strengthening control over wage payments and eliminating abuses in public tenders.

Vitaliy Matselyukh, Managing Partner of Artius Law Firm, presented a series of recommendations for protecting economic competition in the security sphere, in particular:

Adoption of a state methodology for regulating prices for security services.
Amendments to the Law of Ukraine “On Public Procurement”, specifically providing for the disqualification of companies from tenders if they submit abnormally low bids for security services.
Introduction of mandatory VAT accrual and payment for security services instead of applying the simplified taxation system.
Amendments to the Law of Ukraine “On Security Activities” to ensure that licensees comply with labour legislation regarding payment of wages not below the minimum level, and to increase requirements for obtaining and periodically renewing a security activity licence.
Bringing security services provided to municipal enterprises in line with the general rules of the security business and introducing transparent tender procurement procedures for such services.

Oleg Getman, Coordinator of the Expert Groups of the Economic Expert Platform, presented data on the 30 largest companies in the market, drawing attention to anomalies in the ratio of turnover to taxes paid in the first half of 2025.

The European Business Association consistently supports government initiatives aimed at de-shadowing and defends the interests of responsible businesses. For the first time, a high-level professional discussion was initiated specifically on the security services market.

Going forward, the EBA proposes that companies continue the discussion and join forces in addressing problematic issues within its Committee on Business Security and Protection.