STS’s results of work regarding the un-shadowing of alcohol turnover
Press service of the State Tax Service of Ukraine , published 27 March 2020 at 18:00 Chapter: News
Alcohol industry development meeting chaired by the President of Ukraine Volodymyr Zelenskyi which was held on the 1st of November 2019 in Ternopil marked the beginning of the state’s systematic counteraction against the shadow market of alcohol. State tax service actively cooperates with the law enforcement agencies and local authorities to solve this problem.
At that time by approximate estimates about 50% of alcohol production in Ukraine was in the “shadow”. Separate Excisable goods turnover and taxation control department was created in the STS structure in December 2019 to improve the effectiveness of counteraction against the production and distribution of the counterfeit products. Right since the first month of operation, this department has proven its effectiveness.
Excisable goods turnover and taxation control department of the State tax service of Ukraine have conducted a complete replacement of its representatives at the excise warehouses of alcohol and bioethanol producers, also video cameras have been installed since the beginning of 2020. Sudden audits on the status of seal preservation on communications of distilleries and alcohol inventory were also conducted to prevent the production of unaccounted ethyl alcohol at distilleries in different regions of Ukraine. Introduction of electronic alcohol administration system, as well as daily monitoring of indicators of the flow-meters of produced alcohol contributed to the un-shadowing of the industry. Joint control practice jointly with the tax police and representatives of the State enterprise “Ukrspirt” was also introduced.
Tendency towards a steady increase in revenues from the State enterprise “Ukrspirt” to the consolidated budget is an evidence of effectiveness of the specified measures. If in December 2019 this figure was 37.7 million UAH, in January 2020 – 41.2 million UAH, in February – 43.3 million UAH and in the first 25 days of March the figure has already reached 127.8 million UAH. For comparison, in the 10 months of 2019 which preceded the meeting chaired by the President, the State enterprise “Ukrspirt” has paid only 281.8 million UAH to the consolidated budget.
Another result of systematic work on the un-shadowing of alcohol industry was increase in the rate of excise tax on alcohol produced in Ukraine and a significant over-fulfillment of indicators in February and specifically in March.
Alcohol excise tax indicators for the first quarter have already been exceeded by 2.4 times (+ 40.6 million UAH) as of 27.03.2020. Namely, allocations to the general fund of the state budget were: in January – 12.9 million UAH (fulfillment of the indicator – 103.8%), in February – 11.6 million UAH (fulfillment – 142.2%), in March (as of 27.03.2020) – 44.4 million UAH which is 5.7 times more than planned.
“Just in a few months the State tax service jointly with the National police, Tax police and other law enforcement agencies demonstrated that removing the alcohol industry from the shadows is not only possible but inevitable. At present when industry responds to increasing demand for antiseptics by increasing production volumes, unprecedented measures taken in advance to combat illegal production and trafficking of alcohol will bring tens of millions more to the budget” – emphasized Chairman of the STS Serhii Verlanov.
