Expert: Smuggling in Ukraine leads to at least US$10 bln in annual losses

Ukraine&#39;s tax expert Andriy Hmyrin says all experts, assessing the volumes of smuggling at customs, agree that the national budget has at least US$10 billion (about UAH 250-UAH 300 billion) in annual losses. "When calculating the volume of smuggling, various experts come up with different figures. But they all agree that it is at least US$10 billion a year. According to official data, budget revenue from customs duties in 2018 amounted to UAH 27 billion [US$1.1 billion] or 3% of the national budget revenue. Of the total UAH 295.4 billion in VAT that was received in 2018, funds generated from customs VAT accounted for 79%. In general, in 2018, customs provided 40.2% of all budget revenues, including customs payments and import excise taxes. Let&#39;s imagine that all payments would have been channeled into the national budget from UAH 250-UAH 300 billion in smuggled goods flow. This is an additional UAH 100 billion," he said at the First Tax Congress held at the University of the State Fiscal Service Ukraine on December 13. Read alsoCustoms chief Nefyodov refutes allegations of "underperforming" According to Hmyrin, shadow economy, public debt, and corruption pose the greatest threat to tax security today. The expert says the government is yet to draw a plan to comprehensively reform the tax system, while Ukraine&#39;s rapid decline in the PayingTaxes-2020 ranking once again testifies to fiscal reform inefficiency. "Most countries have a systemic plan for reforming their tax system, while we don&#39;t have one. There is no country in the world where they simply &#39;tighten their grip&#39; rather than reduce tax rates and improve [tax] administration so that they deliver a quick economic breakthrough. According to the PayingTaxes-2018 ranking, which compared the tax systems in 190 countries, Ukraine ranked 43rd in terms of the tax system simplicity. However, the country slid to the 54th position in 2019. According to the PayingTaxes study, Ukraine will take 65th place in 2020. Thus, the country will lose another 22 points in the ranking. Such rapid decline in the ranking gives reason to believe that the reforms that have been carried out by the fiscal authorities remain inefficient," the expert summed up.

Expert: Smuggling in Ukraine leads to at least US$10 bln in annual losses

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