№4(15)(2013)

President of Ukraine Viktor Yanukovych in Decree #141\2013 approved the Regulations on the Ministry of income and charges of Ukraine, giving it a range of functions, namely - development and implementation of state policy in control area of timeliness of payments in foreign currency and compliance with order of cash payments for goods (services)

According to document, the main tasks of Minincome are providing single state tax and customs policies to administer taxes and fees, customs duties, fighting against violation of customs and tax legislation, implementation of its powers on control of budget and trust funds revenues. The Ministry is responsible for public policy in control area over production and circulation of alcohol, alcoholic beverages and tobacco products. In addition, office will monitor availability of licenses to engage in economic activities subjected to licensing under law, and trade patents.

As part of the Ministry and its territorial bodies, tax police units are formed. Minister of income and charges of Ukraine shall exercise powers relating to admission, taking and dismissal from service of persons and chief officers of tax police. Thus, established in December last year on the basis of the State Tax Service and the State Customs Service, the Ministry of income and charges got clearly defined range of functions, tasks, powers and responsibilities.

Not so long before, the Prime Minister of Ukraine - Mykola Azarov, explained that primary purpose of creating such ministry in government was to prevent tax evasion. After presidential decree was released, where structure’s authority were defined, Minister of income and charges of Ukraine - Alexander Klimenko, spoke on his vision of office’s future. In a statement, released on government website, he is convinced that "from now the public has an unequivocal understanding of all aspects of our work. This once again shows our commitment to be transparent for business, predictable and stable partner, which should not bring unpleasant surprises".

The Minister assured that department’s priorities remain unchanged. This is - focusing on service, reducing tax burden, rejecting unjustified interference with business, liberalization of rules and conditions for doing business in Ukraine. He also promised permanence in understanding the tax service nature. This is to minimize workflow, facilitate and make convenient registration procedures, tax, reporting, implement new technologies to serve taxpayers remotely, reducing time for administration of fees and other formalities.

"We continue to focus our further development only through equal partnership with business community, constructive interaction with all interested participants, and everything done today and will be implemented in future pursuing goal of positive image of Ukraine as a state where it is easy to open own business and earn with honest entrepreneur activity. This requires considerable effort to avoid even indirect pressure on honest business while monitoring observance of legislation by all economic agents"- said Alexander Klimenko in his statement.

He noted that in recent years number of inspections and other control methods has been reduced, instead they focused on analytical methods of monitoring markets and violations identification. Modern risk-based monitoring system allows finding evidence of offenses, without affecting honest business in any way. This approach made it possible to reduce the state tax service second time in the last three years. Moreover, soon reduction of tax police personnel till optimum number is expected, as required for the most effective performance of functions to fight crimes in tax and customs areas. Personnel Service of new office already has got a new assignment.

The Ministry also supports tasks of optimizing the functions to investigate crimes against the state economic sector as outlined by the President in the National Action Plan for 2013-1014 years, and the main weapon to fight against shadow economy and cases of intentional tax evasion has to be investigators’ intelligence and modern informational technology. Gathering evidence of necessary expertise, legal assessment of violations may be conducted remotely, without pressure on taxpayers. So the next step of ministry should be optimization of investigating economic crimes, reorientation of tax police within risk-based system.

President of Ukraine - Viktor Yanukovych, during meeting of the Committee on Economic Reforms introduced his own vision of newly created office. He stressed that the Ministry of income and charges should give impetus to development of entrepreneurship and create such rules under which payment of taxes and duties will be more comfortable. "The new ministry should be the engine of reform that will stimulate development of entrepreneurship and economy as a whole", - said the head of state.

The President added that he sees the newly created structure as a business partner who has no control, but delivering services. He recalled that in 2013 the rate of income tax was reduced to 19% which is the lowest level among the countries of the Organization for Economic Cooperation and Development. From 2013 business will be able to pay income tax annually, not quarterly. The Head of State pointed out that entrepreneurs spend a lot of time preparing, filing and paying taxes. These costs, according to the World Bank for Ukraine are 491 hours per year, while in Europe and Central Asia, this figure is an average of 260 hours per year.

Apart, the President stressed that the business community is a key issue for predictable tax environment changes. New initiatives should not break the system, and create another stress for taxpayers, but only, if necessary, to improve it. They must be prudent and thoughtful, with well-calculated results, as well as opinions of business.

Chairman of the Tax Committee of the European Business Association, Partner, Head of Tax and Legal Practice Ernst & Young - Vladimir Kotenko, believes that unification under one roof of Ministry of customs and tax services will greatly facilitate and accelerate exchange of information. In comments to UNIAN agency, he noted that this would allow faster response to various challenges due to filling the budget, and create a variety of common databases to ease system administration on fiscal payments, make it more effective and thus increase the chances of getting additional tax revenues.

In turn, the president of the Academy of Finance Directorate of the Ministry of Finance of Ukraine - Tatiana Yefymenko, favorably regarded reform measures of team leaders of the newly created Ministry. "That's great, when ideas are generated by young leaders. It would be strange if they had no desire to discover something" - said Tatiana Yefymenko in comments to journalists.

Meanwhile, recent board meeting of the Ministry of income and charges decided to create a Council for stimulating investment and business activities (Board of Investment). This is a consultative and advisory body to the department, the first meeting of which is planned in May. The Council consists of the Minister, his deputies, representatives of Ukrainian business, foreign investors, NGOs and trade associations, international financial and consulting firms. Together they will prepare recommendations for further development of tax and customs policies to improve investment climate of organizational change in work of the Ministry on legislative innovations.