BOC receives fewer complaints from business for two quarters in a row

In Q2 2018 the Business Ombudsman Council received 411 complaints from businesses in Ukraine. The direct financial impact for this reporting period was UAH 1.2 bn, making a total UAH 12.7 bn since the Council began working. As of the end of the quarter, state bodies implemented 93% of 1885 BOC recommendations. Fully 97% of complainants were satisfied with the Council’s work.
“For the second quarter in a row we have received fewer complaints from businesses, and this is a positive trend. The number of appeals has declined in almost all subjects of complaints. First of all, there was a decline in suspensions of tax invoices, which obviously testifies to improvements in the way the updated tax invoice automatic registration system works. At the same time, the number of complaints in the reporting period is 73% higher than in the second quarter of 2017”, stressed the Business Ombudsman Algirdas Semeta.
Key subjects of complaints in the Q2 2018 included:
•    Tax issues – 62% of complaints. The number of appeals on this subject went down 41%, compared to Q1 2018. Entrepreneurs lodged fewer complaints concerning unwarranted criminal cases, VAT administration and tax reporting acceptance. The only area in which the BOC received more complaints was tax inspections. A separate section of the report is devoted to this problem.
According to the BOC observation, the State Fiscal Service (SFS) closed 39% of administrative appeals with the participation of the Council in favor of the taxpayer. This is much higher than the average SFS figure of 14%. Moreover, having analyzed selected court decisions on appealing tax inspections results, the Council found out that courts ruled in favor of claimants in 90% of cases. Consequently, the SFS can facilitate the work of the judicial system by paying more attention to the arguments of the Council at the stage of the administrative appeal.
•    Actions of law enforcers – 16% of complaints. In comparison with the last quarter, the Council received the same number of appeals with respect to the State Security Service actions, one quarter less regarding the Prosecutor’s Office. However, businesses lodged 19% more complaints concerning the National Police, particularly against its inactivity.
•    Actions of state regulators – 7% of complaints. In absolute figures, the number of complaints decreased by 41% compared to the previous quarter and by 17% compared to the second quarter of 2017.
Altogether, 81% of claimants are Ukrainian companies. After a drop in Q1 2018, the share of large companies grew to 28%. Complaints were predominantly coming from: wholesale and distribution (30%), manufacturing (14%), agriculture (9%), real estate (9%) and individual entrepreneurs (6%). More than a third of complaints, 36%, came from Kyiv.
Given the importance of efficient customs work in fostering international trade and supporting sustainable investment, the BOC has prepared a new systemic report on main problems currently faced by business with customs. In particular, the report looks at such issues as customs value determination, refunds of excessively paid customs duties, classification of goods, the protection of intellectual property rights while transferring good across the border, the intrusion of law enforcers during customs checks and administrative liability for infringing customs rules. These recommendations are based on real cases involving businesses, and an analysis of European customs practice.

Next news: ANNOUNCEMENT: On November 6, 2018, we welcome journalists to the round table with Business Ombudsman Algirdas Semeta