Experts: Tax authorities may be able to control ordinary citizens under the guise of fighting against misdirection

Restricting money transfers is definitely not the way to go in the fight against the shadow economy. The initiatives proposed by the National Bank of Ukraine, supported by the head of the Verkhovna Rada's tax committee, Danylo Hetmantsev, under the pretext of fighting misdirection and the shadow economy, may unleash the tax authorities to check the financial transactions of ordinary citizens and compare their income and expenses for compliance. This opinion was expressed by experts interviewed by UNN.

Hetmantsev reportedthat on February 5, the committee heard a report from the NBU on "miscoding" and shadow financial transactions. According to him, among other things, the NBU proposed "to establish at the legislative level for the period of martial law restrictions on financial transactions using the details of electronic payment instruments, limits on the amount of transactions, their number, etc. As well as the maximum amounts of cash transfers made through self-service terminals.

Deputy Head of the NBU Kateryna Rozhkova confirmedthat the regulator is working on relevant amendments to the legislation.

"I don't even doubt it (that restricting money transfers will untie the hands of the tax authorities in checking ordinary citizens). Because if we say that the country needs to fight the shadow turnover and the shadow economy, it is definitely not being done through card transfers. If there was political will, additional resources for the budget would have been allocated a long time ago, and they would not have involved either raising taxes or restricting card transfers," explained Nina Yuzhanina, a member of the Parliamentary Committee on Finance, Taxation and Customs Policy.

At the same time, according to her, Hetmantsev discussed such initiatives with the National Bank behind the scenes, as he does not consult with members of the parliamentary committee and does not discuss anything in advance. At the same time, according to the MP, even mere statements of this nature can harm the Ukrainian economy.

"If such decisions are made behind the scenes today, we will have a lot of negative consequences. I have even asked Ms. Rozhkova whether they have calculated the negative consequences of even such statements, and not just the benefits they saw somewhere in terms of tax evasion, and that this system of restrictions on transfers will "help" them avoid such evasion," Yuzhanina said.

She added that VISA representatives at the meeting with her noted that Ukraine is currently lagging behind other countries in terms of card transfers and interest on them, and Ukrainians still want to withdraw cash from their cards and then spend it.

"So the question arises - why is this? People often say that they are going to cash out, and such statements, not even actions, are just annoying. It's harm on top of harm. And if someone thinks that bans can achieve any results, this is a road to nowhere," Yuzhanina added.

Economist Andriy Novak notes that the initiative to restrict money transfers, which is currently being discussed, may look logical in times of war, but on the other hand, everything will depend on the amounts from which the restrictions begin and their nature.

"If you look at the structure of the so-called shadow economy of Ukraine, the bulk of the shadow is the use of offshore companies. The second largest shadow is at the customs - smuggled goods. The third is counterfeit products, unaccounted for and untaxed, and the fourth is the so-called salaries in envelopes. This makes it clear that remittances are not even close to being among the possible causes of the shadow economy. Therefore, such restrictions as an argument for fighting the shadow economy do not stand up to any criticism," Novak emphasized.

He added that the tax authorities could be empowered under this pretext.

"If the tax authorities are able to see all banking transactions of each citizen and, based on the amounts of these transactions, compare them with the amount of some official income, then, of course, the tax authorities will use this tool to determine claims against citizens for tax evasion or shadow income," Novak said.

Recall

Experts criticized the National Revenue Strategy until 2030 presented by the authorities because it provides for the complete abolition of banking secrecy. The idea to abolish banking secrecy was personally put forward by MP Danylo Hetmantsev, chairman of the Verkhovna Rada's Finance Committee. According to experts, this is his personal goal.