Oleksandr Klymenko, the Minister for Revenue and Duties of Ukraine, made a presentation at Brussels Press Club on tax and customs policies of Ukraine on occasion of his working visit to Brussels on 6 June 2013.
Speaking about Ukraine’s role in global and European endeavor to fight against tax fraud and prevent tax evasion, Minister Klymenko stressed that Ukraine shares the conclusions of the European Council on the need to further coordinate and enhance joint efforts to tackle tax and fraud and evasion. In this regards, the Minister informed about Ukraine’s intention to introduce amendments to the Tax Code of Ukraine concerning transfer pricing. “Ukraine plans to implement control mechanism for transfer pricing. The main purpose of the bill is to build an effective system of state regulation of transfer pricing. This will strengthen control over tax assets leakage to off-shores and low taxed jurisdictions”, he stressed.
Another step forward in anti-fraud dialogue between Ukraine and the EU and prevention of illegal trafficking in trade will be the signature of Arrangement on cooperation to combat illicit traffic in tobacco products between the Ministry of Revenue and Duties of Ukraine and European Anti-Fraud Office (OLAF) today afternoon. The Minister emphasized the importance of this instrument as more than 92% of cases of smuggling in tobaccos from the customs territory of Ukraine are detected on the border with EU Member States (Poland, Hungary, Slovakia and Romania). “Tobacco smuggling is a global organized crime, and a coordinated approach and cooperation with the EU in this regard is the only effective way to tackle this problem”, Oleksandr Klymenko said.
In a more general context of business climate in Ukraine and the role that newly established Ministry of Revenue and Duties can play for its improvement, Minister Klymenko emphasized that the institutional reform and merger of two services into one single authority will improve the quality of tax and duties administration. The Ministry now is a single authority for formulating tax and customs policies, administration of taxes and fees, customs duties and unified social contributions.
Oleksandr Klymenko also drew attention to the recent business-friendly developments in tax and customs area in Ukraine. He informed Ukraine has been gradually reducing tax rates. For example, in 2011 Ukraine had a 25% revenue tax, today it is 19%, in 2014 the 16%-rate will be reached. VAT rate will also be reduced from current 20% to 17% in 2014. Time needed for taxation purposes decreased from an average of 657 hours/year in 2011 to 490 hours/year in 2012. As of today, an entrepreneur in Ukraine on average spends 300 hours/year on tax administration (average European rate is 267 hours/year). The range of services provided electronically has been significantly expanded. New Service Centres for Taxpayers have been established in each region of Ukraine. They use standard-service approach and modern infrastructure.
In customs, time release reduced 6 times: from 24h to 4h. Average clearance time for a cargo declaration in import is approximately 1,5 hours, export – 40 minutes.