Ukraine

Business

Journal

8:24 AM Friday, December 15, 2017
Government
​Complaints Spike Against Tax Police
Business Ombudsman’s report show State Fiscal Service as main source of complaints; Government approves draft of “Business Pressure Relief Law”
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KYIV -- As the Rada prepares to debate a “Business Pressure Relief Law,” the Business Ombudsman Council reports a rise in the kind of business complaints that prompted drafting of the bill.

Almost two thirds of complaints in the third quarter were against the State Fiscal Service, the agency responsible for taxes and customs duties. Overall, the Council reports 408 complaints in the Q 3, nearly double the number of complaints received in Q2. Almost half of the complaints came from Kyiv and Kyiv region.

Ombudsman officials attribute the rise in complaints to wider business awareness and confidence the work of the two-year-old Council. Since the Council’s start in 2015, the State Fiscal Service has been the leading source of complaints.

"The main reason for the increased number of complaints was a new mechanism for the registration of tax invoices,” Algirdas Semeta, the Ombudsman, told conference her. "At the same time, the number of complaints concerning the receipt of VAT refunds was significantly reduced.”

"Although the largest number of complaints is about the Fiscal Service, this agency has carried out 90% of our recommendations,” said Semeta.

Algirdas Semeta, Ukraine's Business Ombudsman, supports draft legislation before the Rada, the "Business Relief Law." A Lithuanian economist, Semeta served for five years as European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud before becoming Ukraine's Ombudsman in Dec. 2014. (supplied)

Ombudsman Speeds up Work

On its end, the Council reports that it is cutting the average time for a preliminary review of a complaint to about one week. During the July-September period, Council started 283 investigations into complaints, a 77% increase over the previous quarter.

The Council said it is recording a low number of dismissed complaints and has cut the after time for investigation to about two months.

To head off some complaints of these future, the Cabinet of Ministers unanimously approved on Wednesday the draft “Business Pressure Relief Law.”

No Video, Not Valid

This law mandates video recordings of many stages of actions against businesses by law enforcement authorities, notably the State Fiscal Service’s ‘tax police’.

Police searches of businesses and adjudications by investigating judges will only be valid if recorded on video. Businesses have the right to have a lawyer present during a search. Law enforcement officers, in general, will be prohibited from seizing computers and must make copies of files, without seizing the hardware.

Reinforcing the double jeopardy defense standard in Britain and the U.S., the new law will prohibit reopening a criminal case “on the basis of facts identical to those that were the subject of an earlier criminal proceeding that has already been closed.”

The new would also raise barriers to a common police practice of seizing originals and copies of documents.

Semeta and Daniel Bilak, Director of UkraineInvest, are appealing to business groups to convey to Rada members their support of the “Business Pressure Relief Law.” Backers hope the Rada will debate and approve the law in its current session, which runs through the end of December.

UBJ Editor in Chief James Brooke contributed reporting


For comments and story tips, please contact UBJ Reporter Mark Satter at marksatter@theubj.com

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