Beware not to suppress honest business while tightening screws on schemes

Business Ombudsman Roman Waschuk delivered a special report “Tax Invoices Suspension: Recommendations Implementation Status” at the thematic conference organized by Yuridicheskaya Praktika Publishing House.
Roman Waschuk spoke about implementation of recommendations which the Council issued to the Ministry of Finance of Ukraine and the State Tax Service of Ukraine to improve the situation with SMKOR operation (Automated system for monitoring TIs/ACs compliance with the risk degree assessment criteria) based on its own initiative investigation results. 
Immediately upon the investigation results report publication, the Business Ombudsman started monitoring implementation of provided recommendations. Over the past two months, since its publication, BOC has been in active dialogue with the STS, the Ministry of Finance, and the Verkhovna Rada of Ukraine as regards the mechanisms for introducing changes to resolve SMKOR problems and prevent ungrounded cases of tax invoices suspension.
Presently, monitoring of implementation of recommendations by BOC shows that the pace of changes is rather slow, which does not meet business expectations. Although in March 2023, 26,000 entrepreneurs faced blocking of TIs/ACs, which is 38% less than the striking October figure of 42,000 companies (and at the same time four times more than in March 2020), honest business needs more decisive and tangible changes in the state’s approach to identifying tax risks. Moreover, tax issues accounted for over two-thirds of all business complaints to BOC in the first quarter of 2023, which only emphasizes the problem’s relevance.
“We encourage the state bodies — the Ministry of Finance and the STS — to get away from formalism and speed up implementing our recommendations, which should establish the automated SMKOR operation and minimize adverse consequences for business. The Council is also against excluding the tax sphere from the scope of the new law on the administrative procedure,” noted Roman Waschuk, the Business Ombudsman of Ukraine.
We would like to remind you we published our own initiative investigation results in March 2023, where the institution looked into an avalanche-like number of tax invoices suspension cases. The conclusions presented in the Council’s report were supported by leading business associations, including the Chairman of the Verkhovna Rada’s Committee on Finance, Tax and Customs Policy.