Without Business Fragmentation and Unfair Competition: How the Government Plans to Combat Tax Schemes
Ukraine's Minister of Finance Serhiy Marchenko held a working meeting with members of the Interagency Working Group (IWG) on the Detaxation of the Economy. Heads of the Ministry of Finance, the State Tax Service, the State Customs Service, the State Financial Monitoring Service, and the Economic Security Bureau discussed the status of implementing decisions made following the first meeting of the group, which was chaired by Prime Minister Yuliya Svyrydenko.
The goal of the IWG is to move from targeted responses to individual violations to implementing systemic solutions that will prevent abuses and tax evasion. This involves creating transparent and clear conditions for doing business.
“The decisions being developed by the IWG are intended to protect honest businesses from unfair competition by those who artificially minimize tax liabilities and thereby gain non-competitive advantages,” the Ministry of Finance stated.
They noted that additional revenues to the state budget should primarily be ensured by expanding the tax base, reducing the shadow sector, and increasing voluntary compliance with tax legislation. Detaxation is a tool to increase state budget revenues without putting pressure on responsible businesses.
“Detaxation of the economy is one of the Government's key priorities, a component of the state's financial stability, and forms the basis of cooperation with Ukraine's international partners. Achieving tangible results is possible only through systematic interaction of all state bodies involved in this process. It is important to move from fragmented efforts to coordinated cooperation and interaction. Our joint task is to create equal and transparent rules for business and minimize opportunities for the operation of schemes. This is the demand of responsible business, and we take it into account,” said Ukraine's Minister of Finance Serhiy Marchenko.
During the working meeting, information was heard regarding the status of implementing the instructions defined by the protocol of the first IWG meeting. In particular, participants discussed:
- results of measures to counteract tax evasion schemes and artificial business fragmentation;
- proposals for detaxation of the labor market;
- the status of preparations for the implementation of the Electronic Control System for the circulation of excisable goods;
- measures to combat the illegal circulation of excisable products and strengthen interagency cooperation in this area;
- preparation of legislative and organizational decisions aimed at detaxation of the economy and increasing the effectiveness of state control.
As a result, further steps were agreed upon: ways to counteract artificial fragmentation, improve detection of illegal tax evasion practices, and deepen cooperation between government bodies involved in detaxation.
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