Igor Bilous
The State Treasury publishes monthly lists of businesses that have received value-added tax refunds. This process is called "openness" by the State Fiscal Service, which submits the lists.
Is this really true? Let's explore what real transparency would look like in the case of VAT refunds.
The practice of so-called "automatic" reimbursement was in use even before the new administration took office. Even during Oleksandr Klimenko's tenure, lists of enterprises receiving state budget funds were published. So, there's nothing particularly new in this publication.
Taxpayers have always been much more interested in another issue: not how much and to whom was reimbursed, but how much and to whom the state owes in VAT settlements.
It's here that the main point of discussion about corruption lies. If a company has received a tax refund from the budget, it's already been through all the Augean stables. Most likely, the owners are either on good terms with the authorities or have already managed to "snitch" the right people in the Tax Service. Otherwise, they could end up on the list of perpetual debtors, subject to audits and lawsuits by otherwise honest officials.
These things are widely known. And most importantly, they haven't changed in Ukraine for over a decade. Exporters sell goods abroad and are entitled to a VAT refund from the budget (since the goods were not consumed in Ukraine). But this seemingly natural right of taxpayers is closely monitored by tax authorities. It's simply impossible to obtain a tax refund from the budget by law.
The compensation fee fluctuated over time. During Leonid Kuchma's presidency, when everything was just beginning, they might ask for 10% for actual compensation. If the compensation was "under the table" (for fictitious transactions), the rates were naturally higher.
Then, the rates for "fair" reimbursement began to rise. According to our sources, during the "late Yulia" era, they reached 45%. During Yanukovych's time, tax officials discussed figures of 20-30%.
Data on VAT payments on the State Treasury website
Has the phenomenon of kickbacks disappeared today? "Ekonomicheskaya Pravda" has repeatedly reported the words of business representatives about the near impossibility of obtaining a tax refund from the budget. After the victory of the Maidan, rumors circulated across the country that a VAT refund required a kickback of as much as 40-50% of the amount received. These days, when discussing the amount of "gratitude," they talk about 30%, but sometimes higher.
Again, this is just talk – we were not present at any real negotiations on this matter, and we cannot insist on the veracity of the figures.
But there is information of a different kind. While claiming to be transparent, the State Fiscal Service subtly conceals information about value-added tax arrears. And this concealment gives officials enormous opportunities to "manually" regulate budget payments.
On April 19, 2014, changes to the Tax Code came into force, introduced by the Law of Ukraine “On introducing changes to the Tax Code of Ukraine and other legislative acts of Ukraine to eliminate other inconveniences of legal norms.” In accordance with these changes, paragraph 200.18 of Article 200 was supplemented with subparagraph 200.18.2 1 with the following content:
“200.18.2 1. A new transfer of paid taxes, which were collected from budgetary funds, is published every month on the website of the body that provides treasury services for budgetary funds, with obligatory sums air blowing.
Other taxable information related to the submitted taxable authority does not include information with shared access and is subject to compliance with the obligations and procedures established by the central authority of the crown government. to formulate and ensure the implementation of the government’s financial, budgetary, tax and monetary policies.”
As can be seen, the second paragraph of the said subparagraph expressly stipulates that any information related to VAT refunds is not restricted information and is subject to disclosure.
What was done by the management of the State Fiscal Service to implement this clause?
All information related to VAT refunds was kept strictly confidential, not only from the public but also within the State Fiscal Service itself. Many employees were simply denied access to it.
Furthermore, concealing VAT information was the focus of two State Fiscal Service departments: the Department for the Protection of State Secrets, Technical and Cryptographic Information Protection, and the Main Directorate of Internal Security. This means that concealing VAT refund information is a matter of utmost importance for the State Fiscal Service's leadership. It even outweighs the fight against corruption in tax refunds, which theoretically should be the primary focus of the Main Directorate of Internal Security.
At one time, the Ministry of Finance, which oversees the activities of the State Fiscal Service, tried to obtain information about the state of affairs with VAT. On October 8, the Ministry of Finance issued order No. 1016 “On the approval of the form of information about the obligations of collecting taxes on the government budget and the procedure for forming and updating tax information related to taxes were allocated to the government from the state budget.”
With this document, the Ministry explicitly instructs the State Fiscal Service to disclose information on outstanding VAT refund claims at the beginning of the year and as of the reporting date. Government officials were also interested in information on refunds paid, rejected refund claims, new applications, and other piquant details about tax officials. Particularly offensive was the fact that the Ministry of Finance requested all this data not for the overall total for Ukraine, which the State Fiscal Service so carefully conceals, but for each VAT payer.
The order came into effect on November 4. So what? Nothing. According to our data, the Ministry of Finance has no information on value-added tax. There are only fragments that don't allow us to piece together a coherent picture of the tax payment status.
This reveals the true picture of the relationship between the Ministry of Finance and the State Fiscal Service. As in previous years, the government has no direct influence over the country's monetary agency. Oversight of the implementation of the aforementioned order has been entrusted to Deputy Finance Minister Denis Fudashkin , who directly oversees tax and customs policy at the ministry, and State Fiscal Service Chairman Igor Bilous. It appears that the former is unable to enforce his demands, while the latter is slow to fulfill his duties.
If the Ministry of Finance's requirements aren't being met, what can we say about the requests of ordinary citizens? Interpreting the law "On Access to Public Information" liberally, Bilous refuses to make information public.
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