Team of the State Tax Service, led by acting Head Lesya Karnaukh, and more than 80 business representatives from Cherkasy region spoke frankly today about what really worries business and affects work of entrepreneurs every day. Meeting was also attended by Head of Cherkasy Regional Military Administration Ihor Taburets.

As acting Head of the State Tax Service noted, it is in open dialogue that the State Tax Service can promptly respond to business requests.

Among the discussed questions were:

– business fragmentation

This is one of the most sensitive topics. State Tax Service clearly distinguishes between real franchise networks and artificial tax minimization schemes.

According to acting Head of the State Tax Service, law-abiding business has nothing to fear.

“At the same time, systemic violations, where dozens of individuals-entrepreneurs are involved to artificially maintain limits, will remain in the attention area of the State Tax Service. This is about understating tax obligations. And those who use such schemes understand this not worse than the tax authorities” – Lesya Karnaukh emphasized.

– VAT for individuals- entrepreneurs

Another top topic that worries business. And which is directly related to business fragmentation.

“Decision here is up to the parliament. Position of the State Tax Service is that the simplified system needs modernization. According to our calculations, approximately 30% of business entities that are on the simplified taxation system are used in fragmentation schemes. And this is a shortfall in the budget” – acting Head of the State Tax Service noted.

One of the aspects that worries entrepreneurs is complexity of tax administration, if a corresponding decision is made. State Tax Service is already working on simplifying mechanisms, explanations and educational component. To make it stress-free for both business and tax officials.

– block of tax invoices and classifying them as risky

Compared to the beginning of last year, the State Tax Service managed to reduce number of blocked invoices by almost 6 times. Today, this figure is 0.14%. Number of enterprises classified as risky has also been significantly reduced.  

“Another important thing. Today, every payer has effective tool for minimizing risks – ability to receive information about inclusion of a potential counterparty in the list of risky ones through the Electronic cabinet. We have given business right to legally check their buyers or suppliers with their prior consent. This allows to avoid participating in dubious schemes even at the stage of signing the contract” – Lesya Karnaukh underscored.

According to her, the State Tax Service is not going to stop there. State Tax Service wants entrepreneurs to be able to automatically check the counterparty’s status. This requires amendments to legislation. State Tax Service has already submitted its suggestions to the Ministry of Finance.   

Meeting participants also focused on tax audits, risk-based approach, development of digital services and automatic tax debt write-off.

Separately, we discussed things that are not always visible from the outside, but which are very tangible for business. Some problems can be solved at level of the State Tax Service, some – exclusively at the legislative level.

“Dialogue on places is important. It must be constant. I thank business for its work despite all the military challenges. And for its openness. This is the format that gives results” – Lesya Karnaukh added.