Despite some positive developments, in particular in the risk assessment monitoring system, tax issues remain among the top complaints from businesses. This is stated in the Business Ombudsman Council's response to UNN's request.
Details
The Council notes the importance of the Cabinet of Ministers' adoption in June of this year of a resolution that introduced a procedure for appealing decisions on riskiness and failure to take into account data tables. In addition, the BOC notes that a number of recommendations submitted by the Council based on its own investigation into the situation with the risk assessment monitoring system were taken into account. In particular:
- introduction of administrative appeals against decisions on the riskiness of a taxpayer and refusals to take into account data tables;
- improvement of the functions of analysis and forecasting of legislative changes; - active involvement of the VRU in solving problems;
- limitation of the period of transactions in TI/SA for consideration of the payer's riskiness (180 days);
- expanding the list of indicators of positive tax history (introduced on December 9, 2023);
- availability of data on key indicators (introduction of a payer profile) (partially implemented).
However, as the BOC points out, a disappointing trend was that in October 2023 alone, the state blocked UAH 5.1 billion of companies' working capital by suspending the registration of invoices. And the upward trend in this matter has been maintained for the third month in a row. The Council provides such data based on the reports of the State Tax Service.
"Also, in practice, tax authorities' decisions regarding the "riskiness" of companies and blocking of invoices often lack sufficient grounds. The Council is also still observing cases when the tax authorities repeatedly (sometimes up to six times) file appeals against court decisions that have entered into force. The Council will closely monitor whether the amendments to Procedure No. 1165 introduced on December 9, 2023 will help to significantly improve the work of the SECR system, as until recently the situation was still unacceptable for business," the BOC emphasized.
READ MORE: Blocking of tax invoices: in the vast majority of cases, the tax authorities lose in courts on business claims .
Recall
Blocking of tax invoices is one of the main problems that Ukrainian entrepreneurs complain about in the field of tax administration. In general, according to the Business Ombudsman Council's statistics , 57% of complaints from business representatives in the third quarter of 2023 concerned tax issues. As noted by Business Ombudsman Roman Vashchuk in a recent interview , the problem for businesses is not even the level of taxes, but the style of administration. He also added that the tax and customs authorities lose 90-94% of their cases in courts, either in the first instance or on appeal to the Supreme Court.
According to experts, this situation with the courts indicates that the tax authorities are abusing their powers, as the courts are breaking down these decisions. Some, such as economic analyst Pavlo Sebastianovych, directly calls it "schemes."
Among the main such schemes, he names fictitious exports, registration of fictitious VAT from fictitious companies, export of goods under fictitious documents with fictitious VAT and refund of real VAT, twists, blocking tax invoices, granting risky status to an enterprise and organizing shadow schemes to remove this status.
Dmytro Oleksiyenko, a member of the Taxpayers Association Board, believes that MP Danylo Hetmantsev, head of the Verkhovna Rada Tax Committee, is behind this administration policy, because no important decisions are made at the State Tax Service without his knowledge. And he actually runs the tax office through his former assistant Yevhen Sokur.
At the same time, Mr. Hetmantsev called his activities in relation to the tax service "parliamentary control." He also rejected accusations that he was taking over the powers of the executive branch, saying that he was simply helping entrepreneurs.