Yevhenii Sokur: Unshadowing measures significantly affected the increase in budget revenues

Participants of conference organized by the Ukrainian Business Council spoke about unshadowing the retail trade and minimizing smuggling in Ukraine.

As acting Deputy Head of the State Tax Service Yevhenii Sokur noted, tendency of increasing budget revenues relative to the pre-war level is currently maintained. Taxpayers transferred 938.9 billion UAH to general fund of the state budget in January – November 2024. Compared to indicators of the corresponding pre-war period 2021, revenues increased by 374.2 billion UAH or 66.3%.

Value-added tax (balance) for 11 months of 2024 was transferred in the amount of 242.7 billion UAH, which is 102.4 billion UAH or 73% more than in January – November 2021. Tax efficiency increased from 2.7% in 2021 to 3.1% in 2024.

"Increase of budget revenues indicates effectively established dialogue between the tax authorities and business. Interaction formats with involved taxpayers create conditions for reducing level of shadow taxation in industries, increase mutual trust and the overall level of tax compliance" – stated Yevhenii Sokur.

Conference participants discussed unshadowing process in a number of industries. Payment of the excise tax by producers and importers of tobacco products in June – November 2024 increased by 13.1 billion UAH or 31.3%, compared to June – November 2023. Revenues from the RRO/PRRO in November of this year compared to January 2024 also increased by 1.3 billion UAH or 15.1%.

In the market of liquids for electronic cigarettes in the third quarter of 2024, the brand orders increased by 30 times compared to the first quarter of 2024. Signs of manipulation of RRO/PRRO were identified in order to legalize income from the sale of the off-record products for the total amount of 29 billion UAH during 2023 – 2024. Information about the identified facts was transferred to the law enforcement agencies.

Reduction indicator in the level of shadow trade in tobacco market is increase in the volume of production in June – October 2024 compared to the corresponding period in 2023 by 2 billion cigarettes or 18%.

Taxpayers of the alcoholic beverage sector transferred 1.8 billion UAH more to the consolidated budget in 11 months of 2024 than in the same period of 2023. Tax efficiency of the VAT increased to 6.74% in 11 months of 2024 compared to 5.63% in 2023 and 5.16% in 2021. Revenues from the RRO/PRRO increased in November compared to January of this year by 25.1%.

Positive achievements are also being recorded in the fuel market. Payments by the fuel market participants to the consolidated budget in January – November 2024 increased by 5.6 billion UAH or 33.4%, compared to the corresponding period in 2023, including the VAT payments that increased by 4 billion UAH or 61.6%.

Tax efficiency of the VAT in the retail trade in 2024 is 1.04% compared to 0.62% in 2021.

Electronics trade during January – November 2024 brought 0.6 billion UAH to the budget or 109.8% more in value-added tax than in the corresponding period of 2023. Tax efficiency of the VAT increased to 2.29% in 11 months of 2024 compared to 1.14% in 2021. Revenues from the RRO for the specified period also increased by 38.6 billion UAH or 25.5%.

Analytical research of connections between some well-known electronics retail chains has been conducted to determine whether there are signs of using individuals-entrepreneurs to evade taxes. Materials on the VAT evasion totaling 252.5 million UAH have already been formed and submitted to the law enforcement agencies. For example, one chain was identified that involved 105 individuals-entrepreneurs in a scheme, which resulted in the VAT evasion totaling 171 million UAH.

Gambling companies also demonstrate significant payments to the consolidated budget. They transferred 16 billion UAH in January – November 2024. For comparison: for the corresponding period in 2023, this figure was 9.6 billion UAH, in 2022 – 730.9 million UAH, in 2021 – 204.8 million UAH.

As Yevhenii Sokur noted, the State Tax Service is making every effort to support business and create comfortable conditions for reporting and paying taxes. New State Tax Service’s projects, which are currently being implemented by tax authorities, will help change approaches to working with risky taxpayers.

Introduction of the tax risk management system in the State Tax Service will ensure systematic and unified approach to managing tax compliance risks in work of the State Tax Service’s authorities across the entire vertical, focusing efforts of tax authorities on the most risky sectors and taxpayers.

Also, in development of the risk-based approach in tax administration, the taxpayers are offered a new format of communication with the Tax Service – "Territory of high tax trust level". The first list of taxpayers with a high level of voluntary compliance with tax legislation includes 8255 taxpayers who will take advantage of tax benefits. It is expected that a number of participants in Territory will grow every quarter, which, accordingly, will positively affect state of budget revenues.