Members of the Council of the Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine (UNGO TAU) met with the Chairman of the State Tax Service of Ukraine Oleksii Liubchenko in a video conference format on Thursday, July 9. The meeting was also attended by the First Deputy Head of the State Tax Service of Ukraine Natalia Ruban, deputies – Yevhen Oleinikov, Mykhailo Titarchuk and Natalia Kalienichenko, Director of the Administrative Department of the State Tax Service Serhii Zlakoman and Head of the Information Policy Department of the State Tax Service Anastasia Politiko. The President of the Taxpayers Association of Ukraine Hrihol Katamadze, Director-General of the Taxpayers Association of Ukraine Liudmyla Herasymenko, Head of the Taxpayers’ Rights Protection Department Kateryna Hryvnak, and Head of the Administrative and Communications Department of the territorial branch of Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine Yuliia Shchytnik represented the Taxpayers Association of Ukraine.
Oleksii Liubchenko noted that the tax efficiency with VAT (value-added tax) increased from 2.7% in April this year to 3.1% in May and almost to 3.5% in June. For comparison, that was 2.5% in the same period last year. At the same time, taxpayers receive VAT refunds on time. In the first half of the year, taxpayers were reimbursed UAH 75.1 billion ($2.7 billion) of VAT, compared to UAH 63.5 billion ($2.3 billion) claimed for reimbursement.
The Head of the State Tax Service of Ukraine said that they had already managed to create a communication tax platform. In addition, he noted that Ukraine is a “pioneer” (beginner) in the introduction of new technologies. “The fact that some countries are showing interest, and Poland is already finding out how the system of electronic VAT administration works in our country, gives us confidence that Ukraine can be the first at least in something,” Liubchenko said.
Electronic VAT administration system
The head of the State Tax Service of Ukraine stressed that an important task for the State Tax Service is to preserve the system of electronic VAT administration, while removing the subjective influence of tax officials on the work of this system.
Oleksii Liubchenko also drew the attention of those present to the fact that such a system is good and very important for the tax service. Such an indicator as tax efficiency, which increased during the last three months of the State Tax Service’s work by at least a small percentage – 0.8%. That provided an opportunity to further increase of VAT revenues to the budget by UAH 9.1 billion ($327 million). “VAT revenues were doubled this year in June, compared with the same month of last year” – the Head of the State Tax Service said.
He assured that the State Tax Service will do everything to ensure that the electronic VAT administration system works effectively and any subjective influence on it is eliminated.
Oleksiy Liubchenko also said that the management is actively working to ensure that the staff of the service is monolithic and efficient, in order to restore businessmen’ confidence in the tax service.
Then Oleksii Liubchenko handed over the right to moderate the event to the President of the Taxpayers Association of Ukraine Hrihol Katamadze. Mr. Katamadze noted that such points stay being relevant and constant: the appeals of taxpayers – members of the Association to return the budget VAT refund; refutation of the status of “supplier of doubtful tax credit”; cancellation of registration of the VAT payer”; conducting unfounded inspections by regulatory authorities; requests for support of taxpayers by specialists of Taxpayers Association of Ukraine and appeals on other tax issues. Therefore, the Association is constantly active in identifying problematic issues of tax legislation, their development, submission for discussion, initiating appropriate changes to the legislation and solving these problems.
The President of the Association stressed that due to the active position of businessmen in cooperation with the publicity, some of the changes proposed by the Association to improve business have already been reflected in a number of adopted legislation.
The most pressing issue resolved by the Association is the block of tax invoices registration. Hrihol Katamadze noted that the Association was approached by almost 500 companies, which faced this problem from different regions of Ukraine.
Rating “Honest taxpayers”
Hrihol Katamadze noted that the most important project is the All-Ukrainian rating “Honest Taxpayers”, which was launched by the Taxpayers Association of Ukraine in 2011. The rating has already become a kind of Ukrainian National-wide Non-governmental Organization brand, which also helps to attract companies to membership in the Association.
The President of the Association Hrihol Katamadze proudly announced that the Association became the owner of the All-Ukrainian rating “Honest Taxpayers” and the statuette in the form of a female figure on April 27, 2020. The figure is a symbol of the All-Ukrainian rating “Honest Taxpayers”, which combines images of Ukraine and Glory. These rewards certified by certificates were registered in the State Register of Certificates of Ukraine. Hrihol Katamadze thanked Oleksii Liubchenko for personally agreeing to be the co-chair of the High Rating Commission.
Therefore, despite the current situation in Ukraine and in the world in general, the President of the Taxpayers Association of Ukraine Hrihol Katamadze suggested not to break the tradition and start the Rating at the regional level on July 14 this year. Moreover, to announce the opportunity to apply to Rating for taxpayers in the media.
Katamadze asked Liubchenko to assist in the participation of tax authorities in the regions of Ukraine and in Kyiv in conducting the All-Ukrainian rating “Honest Taxpayers – 2019”, because it is an open competition for all taxpayers, who wish to participate in it, regardless of wether he is a member of the Association or not.
Hrihol Katamadze – the President of the Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine, expressed his conviction that such measures are extremely important not only for taxpayers themselves, but also for the state. The Rating of the Association promotes the state’s public gratitude and recognition of the achievements of enterprises that honestly fill the country’s budget, securing for them the status of reliable partners in relations with the state.
Then Hrihol Katamadze gave the floor to the members of the Association Council, who expressed a desire to ask questions to the Chairman of the State Tax Service of Ukraine Oleksii Liubchenko. Alina Skomorokhova – General Director of the specialized metallurgical processing enterprise “TIN IMPEX LLC”, Senator of the European Economic Senate, Honorary Ambassador for Peace asked how the tax service achieves the target values of key efficient work indicators.
Oleksii Liubchenko stressed that the main way for the tax service to achieve the target values of key indicators of effective work is strict compliance with the Tax Code of Ukraine and other regulations and the implementation of daily painstaking work.
Introduction of new electronic services
Marian Hoda – General Director of the territorial branch of Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine in Rivne region, director of LLC “Riven LTD”, Honored Industry Worker of Ukraine asked about the introduction of new electronic services. Deputy Head of the State Tax Service of Ukraine Natalia Kalienichenko noted that much attention has been paid to the introduction of new electronic services. Namely, regarding the improvement of the Electronic Cabinet of the taxpayer, the introduction of unified reporting on SSC(Single Social Payment) and IIT(Individual Income Tax), as well as the introduction of the Single Account and the use of software PPO.
Liudmyla Herasymenko – General Director of the Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine, Honored Economist of Ukraine addressed the Chairman of the State Tax Service of Ukraine with a question that has been worrying members of the Association recently. Namely, about the enterprises that are classified as risky. She gave a specific example: a member of the Association turned to the General Directorate of the Taxpayers Association of Ukraine for help in protecting his legal rights and interests. Because of the appeal of a counterparty, which is Large Taxpayer and provided him with services of products promotion. The counterparty said that he had received a request from the Large Taxpayer Office of the State Tax Service of Ukraine, which stated that the company – a member of the Association meets the characteristics of suppliers of questionable tax credit.
Specialists of the Association had studied the case materials and appealed to the State Tax Service in Kyiv with a request. They provided all supporting documents, including photos, screenshots, which placed ads with analysis of coverage, display and views on YouTube, Instagram, Facebook, etc. Then they received a response that the results of consideration and analysis of information did not establish that the company – a member of the Association does not meet the Risk Criteria. Therefore, Liudmyla Herasymenko noted that it is impossible to create a negative business reputation of enterprises over its counterparties. Apparently, a balanced approach to each taxpayer should be considered.
Oleksii Liubchenko noted that he shares Liudmyla Herasymenko’s position and is absolutely against any “subjectivism” in the process of classifying enterprises as risky. He gave the floor to Deputy Chairman of the State Tax Service of Ukraine Yevhen Oleinikov, who is responsible for this direction. He deals with the process of cutting off “subjectivism” in this matter and proposed to address it personally on the problem of unjustified classification of enterprises as risky.
Lilia Dolinska – Counsil Head of the the territorial branch of Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine in Lviv region, a member of the Coordination and Advisory Board under the Head of the Lviv Regional State Administration, asked about the stage of reforming the model of the new tax service and when it is expected to be completed.
Serhii Zlakoman – Director of the Administrative Department of the State Tax Service of Ukraine, informed that the decree of the President of Ukraine should make the model of the new tax service operational on October 1, 2020. However, it will most likely be amended in accordance with the Memorandum with the IMF (International Monetary Fund), which provides for the deadline – January 1, 2021.
Ivan Iskerskyi is Counsil Head of the the territorial branch of Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine in Ternopil region, Director of the Research and Production Association “Naukovo-vyrobnyche Obiednannia Enerhooshchadni Tekhnolohii”, Candidate of Technical Sciences. He asked Oleksii Liubchenko about the measures taken by the State Tax Service of Ukraine to prevent pressure on business, prevent corruption among tax officials and increase accountability for their illegal actions in order to restore business confidence.
Oleksii Liubchenko noted that first it is necessary to restore prestige of a profession – the taxman. As for the prevention of “pressure” on business by employees of the tax service, he informed that the number of inspections has decreased 5 times over the last 3 years. Oleksii Liubchenko, the Head of the State Tax Service, stressed that his priority is to prevent corruption among tax officials by strengthening their personal responsibility.
At the end of the online meeting, Hrihol Katamadze – President of the Taxpayers Association of Ukraine, and Oleksii Liubchenko, Chairman of the State Tax Service of Ukraine, signed a Memorandum of Partnership and Cooperation between the Ukrainian National-wide Non-governmental Organization “Taxpayers Association of Ukraine” and the State Tax Service of Ukraine for the further development of entrepreneurship in Ukraine. They recognized the need for joint action aimed at creating partnerships between payers and executive authorities, based on combining opportunities.
Hrihol Katamadze thanked Oleksii Liubchenko and all the Heads of the State Tax Service of Ukraine for taking part in an online meeting with members of the Council of the Ukrainian National-wide Non-governmental Organization Taxpayers Association of Ukraine. In addition, expressed hope that constructive cooperation between the Association and the State Tax Service will not only protect business interests but also improve partnerships between tax service and taxpayers in general.
Translated by Yuliia Sachuk