The State Fiscal Service of Ukraine has reported about growth in customs violations by 51% in 2018 compared with 2017, to 48,900 cases of violation of customs rules for the amount of UAH 3.4 billion. The authority reported that the value of goods involved in rules violation cases doubled. In 5,400 cases of violation of customs rules the State Fiscal Service seized goods for UAH 914 million.
“The most common cases are the illegal movement of industrial goods across the customs border. During this period, goods worth UAH 568.6 million were seized for committing violations,” the authority said.
Including customs seized vehicles for UAH 149.9 million, food products for UAH 119.3 million and currency for UAH 76 million.
“According to the results of international cooperation in 2018, more than 712 cases of violation of customs regulations were initiated for the amount of UAH 686.5 million. In addition, during the international cooperation, non-payment of more than UAH 21.2 million of obligatory customs payments was established,” the fiscal service said.
The territorial divisions of the State Fiscal Service, based on the responses received, initiated 29 criminal proceedings, the authority said.
Columb Trade LLC, which delivers cars from the United States, accuses staff of Kyiv’s State Fiscal Service of misconduct and confiscation of personal property of the company’s co-founders during raiding the company’s office, Columb Trade co-founder Pavlo Kazaryan said at a press conference in Interfax- Ukraine on Tuesday.
According to Kazaryan, during the raid, the employees of the State Fiscal Service seized $28,000, nine MacBooks and 11 iPhones, including personal funds and equipment of the company’s employees.
He said that the raid was made on December 26, 2018 on the basis of a ruling of the Holosiyivsky District Court as part of a pretrial investigation registered on the signs of a criminal offense of covering up illegal activities and tax evasion.
Kazaryan himself considers these actions of the employees of the State Fiscal Service as pressure on legitimate business and raiding.
ACCUSES, BUSINESSMAN, FISCAL SERVICE, ILLEGAL ACTIONS, TAXMEN
The State Fiscal Service of Ukraine plans to propose amendments to the Tax Code of Ukraine regarding the annulment of VAT on supplies of grain crops and oilseeds to the domestic and foreign markets. The authority said in a statement to the Ukroliyaprom association, a copy of which has been forwarded to Interfax-Ukraine, the fiscal service proposed abolishing taxation of transactions related to supplies of wheat, barley, soybeans, rapeseeds, sunflower seeds, soy, sunflower, rape and mustard oils on the customs area of the country and for exports.
The fiscal service said that during 2017 and the first half of 2018, companies exported these goods totaling more than UAH 500 billion.
“For 2017 and the first half of 2018, the amount of budget reimbursement of VAT only to the largest exporters of grain and oilseeds (1.4% of their total) was UAH 32.2 billion, or more than 2.2 times higher than the total VAT receipts from almost all economic entities, in the registration files of which one of the activities indicated the production of these products, as well as its sale,” the authority said.
The fiscal service assesses the negative effect of this at UAH 50 billion and indicates a high shadowing of the market in these segments. At the same time, the fiscal service recognizes that the tax administration of VAT in this area and the corresponding supervision and law enforcement measures are ineffective.
In turn, the agrarian associations expressed concern about this initiative, emphasizing that the abolition of VAT refunds could affect not only export, but also operations in the country itself.
“When selling products with VAT, a farmer sends the received funds from paying the tax to compensate to himself the VAT that he paid in the price to his counterparties for various materials: seeds, crop protection agents, fuel, electricity and fertilizers. The remainder is sent to the state. After the implementation of these initiatives, farmers will have to compensate for the VAT paid to their counterparties by increasing the cost of goods,” Deputy Head of the Ukrainian Agrarian Council Mykhailo Sokolov told Interfax-Ukraine.
“If these changes are made to the Tax Code of Ukraine, it will actually mean that UAH 50 billion of export VAT, which, after a long struggle, finally began to be returned in a timely and transparent manner and without corruption schemes, will be taken away from agricultural producers,” the Ukrainian Agribusiness Club’s press service reported, citing Director General of the association Taras Vysotsky.
The Cabinet of Ministers has divided the State Fiscal Service into the State Tax Service and the State Customs Service, the Ministry of Finance has reported on its website. “The reform of the State Fiscal Service will create the basis for the demilitarization of tax authorities, improve the quality of services provided to taxpayers, increase the transparency and accountability of work of tax and customs authorities,” the press service of the agency said citing Deputy Finance Minister Serhiy Verlanov. According to the approved concept of reforming the State Fiscal Service, the tax police will be included in the State Tax Service. Both services will be created as separate central executive bodies, coordinated by the Cabinet through the Minister of Finance.
A commission, headed by Verlanov, will be created for the service reorganization.
The Cabinet intends to hold a tender for the leaders of both services within three months after the approval of a government resolution, the ministry said.
The resolution takes into account the recommendations of the IMF, the Finance Ministry added.
The Cabinet of Ministers of Ukraine has dismissed acting Head of the State Fiscal Service of Ukraine Myroslav Prodan on his own wish and announced a tender to select the head of the authority, acting Finance Minister of Ukraine Oksana Markarova has said.
“The issue that we have already discussed for a long time is the holding of a tender for the position of the head of the State Fiscal Service. The holding of an open and transparent tender is very important for further reform, including the State Fiscal Service reform. The government today decided to start and announce the tender,” she said after a government meeting on Wednesday.
Markarova also said that Prime Minister Volodymyr Groysman instructed the National Service for State Governance and the Ministry of Finance to begin procedures for holding the tender.
“To avoid conflicts of interest, the acting head of the State Fiscal Service decided to resign at his own will. The government backed this decision. Before the tender, Oleksandr Vlasov will act as head of the State Fiscal Service,” she said, adding that Vlasov headed the Phantom special unit of tax police for three years.
“The government’s steps to combat smuggling and electronic services in the State Fiscal Service will continue … One of the main tasks is the preparation of a transparent tender to select the head of the State Fiscal Service,” Vlasov said.
“I understand perfectly well that the attention of the, business and international partners of Ukraine will be attracted to the tender.. Perhaps we will see attempts to politicize the process… In order to avoid conflicts of interest and any speculation on this issue, I asked the government to appoint another acting head of the State Fiscal Service,” Prodan wrote on Facebook social network.
Ukraine’s customs in January-July 2018 opened seven cases for violating customs rules on importing and exporting goods included in the customs register of intellectual property rights for UAH 1.4 million, Ukraine’s State Fiscal Service (SFS) said on Monday. Since the start of the year, customs officials have 4,200 times halted customs clearance because of possible violations of intellectual property rights, the SFS said. “In general, the situation as of August 1, 2018, is as follows: the legal owners of intellectual property rights entered 3,818 items into the customs registry. Of them, 206 have been entered since the start of 2018.
The registry lists items of ownership of intellectual property and associated rights, inventions, useful models, industrial samples, trademarks, geographical designators (indices of origin of goods) and plant varieties, the service said.
One case was brought against a Ukrainian entity that tried to import from China 4,400 pairs of sneakers with markings similar to the ADIDAS, NIKE, PUMA logos. The court confirmed that the goods were imported in violation of intellectual property rights. Goods worth more than UAH 1 million were confiscated seized and a UAH 17,000 fine was imposed.
“In a second case, a Ukrainian private enterprise attempted to import 417 headphones from China with unauthorized use of the image and the APPLE logo, which is included in the register of objects of intellectual property rights,” the agency said.
Under a court decision, goods worth UAH 104,200 were confiscated and the court also imposed a UAH 17,000 fine on the offender, the SFS said.
