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Every month Ukraine loses 120 mln USD due to tax evasion in tobacco market

Source : 112 Ukraine

Law enforcement officers exposed the scheme according to which enterprises carried out wholesale trade in tobacco products, but not all products were noted in accounting
14:00, 26 August 2019
Open source
 
Every month Ukraine loses 3 billion UAH (120 million USD) due to gray schemes in the tobacco market, which help to avoid excise duty. This was announced by Deputy Chairman of the National Police Igor Kupranets, the press service of the Ministry of Internal Affairs reports.

"Today, there are two problems: the first is the smuggling of cigarettes to Ukraine and moving them to Europe, the second is the existence of gray tax evasion schemes," Kupranets said.

He informed that law enforcement officers exposed the scheme according to which enterprises carried out wholesale trade in tobacco products, but not all products were noted in accounting. In the documents they reflected the nomenclatures of other product groups, and this allowed to avoid paying the 5% excise duty rate.
 
Related: Zelensky not to impose distributed profit tax in Ukraine


Such a “shadow” money circulation helps to legalize the “conversion centers”, which representatives, in turn, for the remuneration of 2-3% acquire in real enterprises volumes of documented amounts of a tax credit for VAT.

“From such a scheme, losses to the State budget in terms of non-receipt of tax payments monthly amount to almost 700 million hryvnias (28 million USD) in terms of excise duty, as well as about 2.5 billion hryvnias (1 billion USD) in terms of VAT,” said the Deputy Chairman of the National Police.

"We must put an end to the smuggled cigarette market and counterfeit production in other Ukrainian factories," said Interior Minister Arsen Avakov.
 
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