Oleksiy Lyubchenko: Cooperation with the IMF is one of catalysts for systemic changes in the serviceChapter: News

Chairman of the State Tax Service of Ukraine Oleksiy Lyubchenko held a working meeting with representatives of the International Monetary Fund: Senior Economist of the IMF Budget Department Enrico Aav and IMF external experts Tiina Tamm, Dmitry Egorov, Dave Hartnett and Michael O'Grady. Topics for discussion were departmental reform of the State Tax Service, legislative changes and work of the Tax Service in terms of filling the budget and un-shadowing the economy.

At present, the State Tax Service is actively working on the introduction of a single legal entity. This is important institutional reform that changes functioning of entire structure of the Tax Service. Chairman of the STS Oleksiy Lyubchenko noted that during the preparation of a single legal entity model, plan for the implementation and delegation of powers in the Tax Service was guided by the IMF’s recommendations and suggestions.

“First of all, the Tax Service’s mission and working priorities have been changed. We have moved away from position that the Tax Service allegedly provides revenues to the budget, as it was with the previous mission. The new mission affirms vision that the State Tax Service should be a transparent, modern and technological Tax Service that provides quality and convenient services to the taxpayers, effectively administers taxes, fees, charges and shows intolerance towards corruption.” – stated Chairman of the State Tax Service of Ukraine.  

Any inconveniences in service, high-quality tax service and the STS as an effective executive power body with a clearly constructed vertical and division of functions – such results are expected from the new reform in the Tax Service.

Oleksiy Lyubchenko also noted that the advisory support of international experts to the Tax Service is important. After all, today the STS is building the final model of service and recommendations of international experts are extremely useful.  

“We are grateful to representatives of the International Monetary Fund for their support and assistance. Your reports and recommendations that we receive upon the completion of IMF missions, allow us to hear an objective opinion about our processes from outside observers, that is, unbiased experts. This gives us the opportunity to pay attention to those processes that previously seemed clear and worked out” – emphasized Oleksiy Lyubchenko.

Taxpayers are positive about changes in the tax sphere. Despite the increase in the indicative figures of budget revenues by 2 billion UAH in July 2020, the indicative figures of the Ministry of Finance of Ukraine were fulfilled by 123.1%.

Specifically, such results were achieved through effective measures to un-shadow the economy and destroy the tax evasion schemes.

Much attention is currently paid by the STS towards the development of corporate culture. According to Chairman of the State Tax Service, it is impossible to change negative image of the tax specialist without systematic changes in the tax specialist’s attitude to their responsibilities. This cannot be achieved without cleansing from corruption. Partnership between the Tax Service and business should be based on mutual respect. That is why we are currently working with employees of the Taxpayer Service Centers in order to improve the communication culture and level of the taxpayers’ service.

Chairman of the STS expressed gratitude and hope for perspective work, given that the IMF’s  team of experts was joined by Dave Hartnett and Michael O'Grady, former Chairmen of Tax Services in the UK and Ireland. Their experience in the top management positions of their countries’ Tax Services gives a reason to hope for full understanding of challenges and opportunities of the institutional reform of the State Tax Service, which is currently being implemented.

In turn, the IMF representatives noted positive changes in the work of the Tax Service in recent months. According to them, they are impressed by the sequence of steps of the Tax Service and balanced internal policy aimed at achieving results.

Specifically, international experts expressed readiness to provide advisory assistance to Ukrainian tax authorities in terms of the service’s functioning. Attention is also paid to the need to maintain a high level of taxpayer’s service, quality tax administration and implementation of IT technologies.