Businesses complained more about unreasonably opened criminal proceedings on tax evasion

In January-March 2021, the Business Ombudsman received 425 business complaints about state bodies’ malpractice, which is 6% less than in Q4 2020. At the same time, the number of investigations completed by the institution was 10% higher than in Q4 2020. With the Council’s facilitation entrepreneurs managed to refund and save UAH 126 mn. Among the complainants who filled out the feedback form, 97% were satisfied with cooperation with the BOC.
Non-enforcement of court decisions on tax invoice registration was the most common subject of complaints for the first time during BOC operations – in the reporting period the institution received 56 such appeals. In February 2021, the institution issued a systemic report with 26 recommendations to state bodies to address this issue. Appealing results of tax inspections has become the second most widespread subject of business appeals (49 complaints). This is linked to actual lifting of the moratorium on tax audits of legal entities. Inclusion in risky taxpayers lists was in the focus of 27 appeals.
 
‘In the reporting quarter businesses complained more about unreasonably opened criminal proceedings on tax evasion. To address this issue, the Business Ombudsman Council systematically recommends that state bodies cease criminal prosecution for tax evasion until the final settlement of tax liabilities. Earlier, in accordance with the BOC recommendations, the threshold amount of actual non-receipt of taxes to the budget was raised triggering this act to be considered a crime. We have also repeatedly stressed the need to create a new body to investigate economic and tax crimes – many of our recommendations are finally taken into account in the law on the Bureau of Economic Security of Ukraine’, the Business Ombudsman Marcin Święcicki pointed out.
There were more complaints about actions of the National Police, the Prosecutor’s Office, the customs and state-owned enterprises. The number of complaints on the National Police has almost doubled in comparison with Q4 and Q1 2020, particularly because of complaints on procedural abuse and inaction of the National Police. Entrepreneurs also complained more about procedural abuse of prosecutors: + 120% than in Q4 2020 and + 22% as compared to Q1 2020. As compared to Q4 2020 and Q1 2020, entrepreneurs complained more about actions of state regulators, inter alia, the number of appeals related to the DABI and StateGeoCadastre went up.
The VRU Committee on Economic Development recommended a new version of the draft law on the Business Ombudsman Institution be considered in the first reading at the plenary session of the VRUtaking into account comments of the VRU Main Scientific and Expert Department and MPs. In particular, the document clarifies conditions of cooperation with state bodies: the institution will not draw up administrative protocols for civil servants who do not cooperate with the BOC; access to official information will be provided only within the scope of investigated cases; as before the BOC will issue reasoned recommendations not orders to state bodies.
The Q1 2021 report is available here.