At the end of last year, the Verkhovna Rada of Ukraine cancelled the moratorium on tax audits that had been in place since the beginning of martial law, after which businessmen began to complain about constant inspections by the tax authorities. According to lawyers, the tax authorities have the right to conduct a scheduled documentary audit under an accelerated procedure and verify data starting from the 2017 reporting year, Komersant ukrainskyi reports.
Among those dissatisfied with the work of the tax authorities is a businessman from Bucha, Oleksiy Zinevych. He shared his story on Facebook.
“As soon as the moratorium on business inspections was lifted, there was a continuous flow of requests, inspections, demands, various letters and orders from all possible inspection and controlling bodies… Today, the inspectors from the NCCIR came again, even though they had already visited us a few weeks ago. Instead of working, we have to deal with replies, meeting inspectors, responding to demands, and so on.”
– the entrepreneur wrote on his page.
The moratorium was cancelled despite constant complaints from businessmen about tax inspectors. According to Yulia Drogovoz, Vice President of the Ukrainian League of Industrialists and Entrepreneurs, the biggest problem is still the lack of transparency in the State Tax Service’s tax decisions based on the results of inspections and the lack of performance indicators for control and inspection work.
“This allows the State Tax Service to manipulate the relevant statistical data, misleading all users of this information with inflated figures of additional tax charges and penalties. It is necessary to change the philosophy of relations between taxpayers and the State Tax Service, turning the tax service into an advisory rather than a punitive body,” she said,
– she said during the discussion of the Business Ombudsman Council’s investigation.
According to the published report on the results of this investigation, from year to year there are significant “gaps” between the amounts of accruals, approvals and actual budget revenues. During this period, excluding 2020 and 2022, when there was a moratorium on audits, the annual amount of additional charges increased from UAH 34 billion in 2017 to UAH 90 billion in 2021 and to UAH 75 billion in 2023.
“The official statistics of the State Tax Service of Ukraine show that in 2023, most court decisions were made in favour of taxpayers. These statistics indicate the creation of undue pressure on bona fide taxpayers, which ultimately harms the development of Ukraine’s economy,”
– Natalia Artemchuk, Manager of the EBA Tax and Customs Committee, said during the discussion of the investigation.
According to the State Tax Service, on average, in 2017-2021, 74% of tax audits (excluding desk audits, when only the correctness of tax returns is checked) resulted in the issuance of acts, and in 2022-2023 this figure increased to 85%.
Also, according to the report for Q4 2023, in 90% of cases, it is Ukrainian businessmen who complain about the tax authorities. The share of complaints from foreign businesses was only 10%. Small and medium-sized businesses make up the majority of complainants – 66%, while complaints from large companies account for 34% of appeals.