State Customs Service: Money lost in 2022 / Picture from Channel 24 collage
In 2022, the State Customs Service only achieved 60% of its plan, which some members of parliament criticized as a failure, labeling it the weakest link. Channel 24 I wanted to find out how much less money the customs received last year and why.
State Customs Service. The weakest link
Chairman of the Tax Committee Daniil Getmantsev criticized The State Customs Service only met 56.9% of its plan in 2022, leading to a shortfall of over 227.5 billion hryvnia for the state.
A member of parliament agrees that the customs' performance in 2022 suffered from a three-month suspension of customs payments, and despite their resumption in July, the situation did not improve significantly.
Daniil Getmantsev
Head of the Verkhovna Rada Committee on Finance, Tax and Customs PolicySystemic problems of the service and the inability of the body’s leadership to overcome them are having an effect. Obviously, among all the financial authorities, customs is the weakest point. Undoubtedly after BEB.
Yaroslav Zheleznyak also weighed in on the situation, noting that various factors such as war, loss of transit, and customs benefits influenced the customs' work, but he doubts that these factors account for 43% of the revenue shortfall. commented It is noted that the customs consistently failed to meet the monthly target of 44 billion, according to Zheleznyak.
- Devaluation and inflation have favored customs payments, but this has not been evident in the results.
- He also believes that the cancellation of almost all customs privileges in July did not impact budget revenues much.
- “Not an outright failure”
Expert Tatyana Ostrikova
She argues that the failure to meet the plan was not solely due to the customs authorities' performance, but also because of the overall decrease in imports, economic conditions, benefits, and the reduction in the VAT rate on fuel. However, she does acknowledge that there is room for improvement in efficiency. thinksOstrikova suggests examining the budget to determine how much revenue customs lost due to benefits and other factors.
The State Budget for 2022 projected import VAT, import excise, and taxes on international trade to be UAH 519 billion, as against UAH 528 billion.
The impact of reducing the VAT rate on fuel
Tatyana Ostrikova
Member of the Supervisory Board of Altbank JSCThat is, the pre-war indicator for customs was not only not reduced, it was increased with the start of a full-scale war. In my opinion, the decrease in the VAT rate on fuel and oil products also had a great impact on the reduction of customs duties.
From January to September 2022, imports amounted to 6.1 billion dollars, marking a 72% increase from the same period in 2021.
- At a 20% VAT rate, the budget would have received $1.2 billion in taxes from this amount. However, at a 7% rate, only 427 million dollars would be collected.
- This means that due to this benefit, customs revenues lost 793 million dollars, or 25 billion hryvnias.
- State Customs Service. Customs holidays
The so-called 'customs holidays' in April-June 2022, which caught businesses off guard, also had an impact.
Ostrikova believes that due to customs holidays, imports of goods during those three months totaled $11.6 billion, and the average pre-war tax burden on imports was $0.26 in taxes per $1 of imports.,
— Thus, the customs authorities could theoretically have collected 3 billion dollars, or 86 billion hryvnias, from the 11.6 billion dollars worth of imports..
- All in all, these factors led to a “shortage” of UAH 116 billion. When added to the actual 301 billion hryvnia, the total came to 417 billion hryvnia. Where did the over 100 billion potential earnings go? I believe we should consider the overall economic decline and imports. I don’t want to speculate, I prefer to hear the figures from the government agencies. Lastly – benefits for the import of cars, generators, batteries, transformers and other “energy” and non-energy goods
- concludes the economic expert.
State customs service. Corruption schemes at customs,
— Corruption at customs is also mentioned by Elena Shcherban, Deputy Executive Director of the Anti-Corruption Action Center. She emphasized that the Bureau of Economic Security (BEB) should have addressed such crimes, but there are no visible results.
So, there is no impact from customs and the agencies responsible for bringing the economy out of the shadow economy. They are not fulfilling their duties, they are engaging in corruption
Yaroslav Zheleznyak
Economist, people’s deputy of the Verkhovna Rada of the IX convocationAnd the main reason for such a failure of customs is very simple: they steal there. Billions are being stolen, and the leadership of the customs now looks more like a bunch of thieves than people related to power during the war.
states Shcherban
Ukrainian grain export scheme,
— Zheleznyak states that the VSK for economic security received a lot of information about corruption at customs during grain exports. More than 10 senior customs officials were involved in the recent scheme, which was exposed by the SBU along with the Bureau of Economic Security..
A large-scale tax evasion system was established for Ukrainian grain exports. As a result, the state lost hundreds of millions of hryvnia. To carry out the scheme, its participants engaged over 370 commercial entities with indications of fictitiousness
highlighted in the SBU
The process for exporting grain through the facilities of grain terminals in Odessa, Chernomorsky, and Yuzhny ports worked as follows:,
— Through fictitious entities, businessmen extensively purchased wheat from private farmers, agricultural enterprises, and large agricultural holdings..
Then the products were transferred from one intermediary company to another in order to confuse trade chains and avoid paying required fees.
- Subsequently, the grain was sold to exporters for foreign sales.
- State Customs Service. Number of customs violations in 2022
- In 2022, the rate of customs rules violations increased by 5%, states the State Customs Service. In the past year, 11,098 violations of customs rules were identified, amounting to UAH 2.9 billion. In total, items of offenses worth over UAH 697.5 million were confiscated, including:
industrial goods for UAH 457.5 million;
food products and agricultural products for UAH 49 million;
- currencies for UAH 147.3 million;
- vehicles for UAH 43 million.
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DOSSIERState Customs Service: How much money the customs did not receive in 2022 / Collage of Channel 24 The State Customs Service fulfilled the plan in 2022 by only 60%. Some people’s deputies called it a failure, calling the body the weakest link. Channel 24 I decided to figure out how much customs received less […]
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