Read the original text at eurointegration.com.
According Transparency International, in 2015 Ukraine ranked 130th position (from 168) in the world ranking of corruption perceptions. In 2014, it was 142th (of 174 countries).
In Ukraine, almost all state organs are embraced with corrupt schemes and bonds, but the undisputed leader is the State Fiscal Service (SFS).
Every fourth entrepreneur in Ukraine faces corruption by employees of SFS. These are studies of business ombudsman, who notes that 43% of complaints filed in 2015, concern SFS.
With this level of corruption, which has not changed in the past two years, nothing is done to improve the business climate, reduce rates, improve tax administration, and simplify the accounting.
The working group led by the Ministry of Finance worked out changes to the Tax Code. They include five important steps that will help to significantly reduce corruption opportunities of SFS.
The first step - the elimination of the tax police.
Repression body created by Prime Minister Azarov, almost never performed its direct function: the fight against tax crimes. There are numerous instances of abuse by tax police and complaints from entrepreneurs.
According to People's Deputy Andriy Zhurzhiy, 85% of prosecutions for evasion of taxes are closed for lack of evidence.
This shows the absolute ineffectiveness of the body, and numerous complaints and the detention of tax police on bribes confirmed that the main objective of office workers is their own enrichment.
The best way out is creating financial police or financial investigations institution. The new body should have a different functional detection of crime.
Not collecting evidence through pressure on employers, but analysis of risky transactions that have signs of tax fraud, collection of evidence-based information from the computer tax bases.
That foundation should not be punitive, but analytic function to minimize the negative impact on business.
The second step is prevent SFS from conducting database administration.
The main direction of improving the administration is implementation of electronic services. It will prevent unauthorized interference in the database. SFS employees systematically abuse their responsibilities and carry out a manual intervention in the tax information database.
In 2015, three terabytes of tax information was lost. This indicates on a possible concealment of crimes by the fiscal authorities. The results of the investigation have not been published. This step will eliminate conflicts of interest and manual intervention of the fiscal authorities in the database.
The third step - the maximum computerization of tax administration.
Currently, the taxpayer does not have full access to information on the taxes paid by him and submitted reports.
An entrepreneur cannot be convinced that all tax reporting was promptly accepted, and taxes are fully paid.
The introduction of the electronic cabinet taxpayer will avoid such situations. The payer will always know when and how he should submit reports whether it was promptly accepted and when to pay taxes.
Electronic services would help entrepreneurs to get information on contractors and ask questions. This will reduce corruption opportunities and improve quality of service business.
If the electronic cabinet did not work, and entrepreneur did not submit timely reports, he is exempt from responsibility for it. The lack of personal contact with business taxman reduce corruption opportunities of SFS employees.
The fourth step - the creation of a single register for VAT refunds.
VAT refund system for a long time remained the most corrupt aspect of the tax system. It was not only a way of stealing from the state budget billions of hryvnias, but also a way to pressure businessmen to extort bribes for refund.
In 2015, the introduction of electronic VAT administration preclude direct theft from the state budget, and the introduction of a single registry was to make the process transparent and with only one registry.
However, the Parliament has created two registries. This gave the opportunity to redress corruption.
In the first half of 2016, due to the VAT refund to farmers, who used special regime, 7 billion UAH unsecured VAT was refunded. After exposing this fact the head SFS stopped refunding of VAT in the country, causing considerable damage to the business.
The existence of two other registers allows taxpayers to receive funds on time, while the others have to wait for several months. As a result, everyone wants to get into the first register. Thus, the two registers divided taxpayers into friends and foes. In general, the VAT refund explains why we do not go to investors.
The bill proposes to create a single register of VAT payers and to force SFS publish all information on applications for reimbursement of specific terms of repayment. Single Register will remove discrimination against individual taxpayers and create effective anti-corruption mechanism.
The fifth step is tax advice.
For a long time tax advice were an element of corruption opportunities for SFS. Some separate entrepreneurs applying to SFS have got tax breaks, interpreted tax law so as to reduce payments to a particular company for a bribe.
The general advice was often carried out only in fiscal terms - despite the legislation and the economic content of business transactions.
Perhaps it is not the tax reform, which is long waited by the business, but without these steps, measures to reduce or simplify reporting rates would be ineffective.