Achi news desk-
A list of taxpayers with a high level of voluntary compliance with legislation may appear in Ukraine. They will enjoy several advantages in tax administration during martial law. This is reported by Focus, writes agronews.ua.
The draft amendments to the Tax Code of Ukraine No. 11084 dated March 13, 2024, which proposes to introduce a list of taxpayers with a high level of voluntary compliance with tax legislation, has been registered in the Verkhovna Rada. The document was presented by the head of the finance committee, Danylo Hetmantsev, and a group of people’s deputies.
Draft law No. 11084 proposes to include taxpayers in the list of taxpayers with a high level of voluntary compliance with tax legislation, provided that there is no tax debt and arrears in the payment of VAT, as well as any breach of tax obligations in terms of submission reports and absence, according to the results of documentary checks, of inconsistent tax (financial) obligations of the taxpayer in accordance with tax-decision notices and compliance with other requirements.
The State Tax Service of Ukraine will maintain the list, and the taxpayer will receive information about its content through the electronic cabinet.
The intention is that entrepreneurs included in the list will receive the following benefits:
- a moratorium on documentary checks, with the exception of certain types;
- shortening of camera terms and documentary checks for budget compensation purposes — 5 calendar days;
- individual tax consultations within 5 calendar days;
- a compliance manager is assigned to the taxpayer, with whom the taxpayer will be able to interact, especially with the use of remote communication tools, especially in video conference mode;
- the taxpayer has the right to obtain information about the tax information available to the supervisory body, which may indicate tax risks in the taxpayer’s activities, as well as advice on eliminating such risks, at his request within a period of five days.
“I would like to note that the project is not about tax reductions,” said Oleksiy Bebel, deputy head of the Alibi Bar Association.
According to him, the document is about creating a list of taxpayers with a high level of voluntary compliance with tax legislation, which will include legal entities and individual entrepreneurs who at the same time meet a number of requirements.
In addition to the requirements listed above, depending on whether they are legal entities or sole proprietorships, and for legal entities depending on whether they work on a general or simplified taxation system, several other criteria are added to included in the list:
- the level of corporate income tax payment is equal to/above the industry average;
- that the accumulation and payment of income in the form of wages for the last two reporting (tax) periods are made at a level that is not less than the average wage in the relevant industry in the relevant region;
- the area of ​​land plots on lease available to the taxpayer in ownership (right of ownership/use) is not less than 500 hectares inclusive or land plots on lease from community and/or state ownership — not less than 0.5 hectares (of 1 January of the current year), who declared by February 20 of the current year and for which the amount of tax liability from the land fee has been paid within the terms set by law.
The State Tax Service of Ukraine must enter data in this register every quarter based on the results of the reports. Therefore, it can be said, in fact, that the “entry” of a legal entity or a private enterprise into the list should be made almost automatically.
“One should agree with those representatives of the mass media who express concern about the creation of some separate working arrangements, which are somewhat favorable, for some enterprises and private enterprises, as well as the risks of corruption associated with this. However, I believe that during the war, when the state cannot stimulate business with money, it will be forced to introduce some non-material means of support. So, really, I wouldn’t dramatize it. First of all, these so-called benefits are not so great, but the requirements for their acquisition, on the contrary, are serious. Furthermore, the draft law defines clear criteria to be included in this list and to update it regularly. Under such conditions, the subjective factor is reduced to a minimum. Therefore, I believe that the draft law of Ukraine is fair and necessary precisely in view of honest and transparent business support during the war,” explained Oleksiy Bebel.
The adoption of proposals in the draft law, submitted to the Verkhovna Rada by the chairman of the financial committee Hetmantsev, is a real hope. But the urgency of adopting such hasty changes does not exclude the corruption element, which cannot play the least role in determining “their” taxpayers with a high level of voluntary compliance with tax legislation, says Andrii Shabelnikov, partner manage Evrika Law.
The case of Ukraine economist Volodymyr Dubrovskyi, the main expert of the tax reform group of the Expert Economic Platform, agrees with him.
“This is not about tax benefits, but about dividing taxpayers into those who are considered “white” and all the rest. To be honest, I think it’s an idea very bad. From many sides. “Ourselves” will fall to “white”, their competitors will fall to “black”. Probably, there will be some kind of ticket to become “white”. Actually, in according to the proposed criteria, it is impossible to divide into those who comply with the tax legislation and those who do not. For example, if the payer has a good record, which means that he is either really pay honestly, or have always negotiated well with the tax authorities. As long as we have the VAT administration as it is and the income tax, any taxpayer can be overcharged (except the simpler system). And he will have a tax debt. Then he will challenge it in court, and in 90% of cases the court will recognize his correctness, but he will already have a tax debt, so it will be automatically deleted of these “white” categories. That is, at the sole discretion of the tax authorities – who to leave with these “complaints” and who is not. Whoever quarrels with them, or who quarrels publicly with them, will always be among the “non-white ones,” said Volodymyr Dubrovskyi.
According to experts, it is related to the idea of ​​creating preferences for part of the business based on criteria that are not transparent in the aggregate. Therefore, the success of the initiative will depend to a large extent on the clarity of the criteria for selecting taxpayers who will be considered as complying with the tax legislation, as well as on the transparency and fairness of the mechanism for their select and monitor compliance.
“It is important that these processes are as open and understandable as possible for all market participants in order to avoid possible abuses and increase trust in the country’s tax system,” adds Stron Legal Services lawyer Kateryna Strukova.
Discussions continue in Ukraine about the need to restart the tax system.
According to Danylo Hetmantsev, the head of the Finance, Tax and Customs Policy Committee of the Verkhovna Rada, the National Revenue Strategy up to 2030, adopted by the government, is a road map for future changes in the state’s tax and customs policy. It envisages the introduction of new methods of tax and customs administration, which are claimed to correspond to European and global practice.
Hetmantsev calls the reform of the tax and customs authorities themselves in two strategic directions, such as digitization and anti-corruption, a feature of the strategy.
“We must first, with you, transform these bodies into ones that society will really trust. This should happen exactly in 2024-2025. And already in the period after the war, we will set out to reform the tax system itself significantly. But the 1st stage is mandatory for us to move to the 2nd stage,” said Hetmantsev in an interview with Ukrinform.
Economic experts agree: indeed, the tax and customs services need to be reset, but they note that under the guise of reset, the government can clearly separate “its” from “foreigners”.
“The icing on the cake of the draft tax law is the very subject of resetting the tax service. Yes, Hetmantsev is right about restarting the tax and customs services. There is a business group that is in favor of tax reforms, in particular, for replacing the tax system, and criticizes the current system. However, the following trick is performed: they say: “This is a “white” business that does not criticize us. (But it does not criticize because otherwise it would become “not white”) immediately. And there are optimists – all the rest, about whom we have questions … That’s why they criticize us, because they don’t want to pay taxes.” This is actually the basis of this draft law. There is a business that thinks it will enter this “white” list until it solves this trap. There are also deputies who know very little about the subject and think: “Oh, that’s great! We’ll create an incentive to pay taxes and help the tax office not waste time on audits of the those enterprises that follow the rules.” And in fact, this is the choice of privileged groups, which is bad,” Volodymyr Dubrovsky is sure.
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