“Taxpayer advocates want government to be more transparent, taxes simpler”

As Ukraine’s businesses continue to find major loopholes in the nation’s tax code, organizations are stepping in to keep lawmakers and taxpayers accountable.
While there are many institutions responsible for shaping the tax code — including the State Fiscal Service, the Finance Ministry and parliament’s Taxation and Customs Policy Committee — they fall short of creating a stable, simple and transparent system.
That’s why, during the past two years, non-governmental organizations and other initiatives have stepped forward to lobby their causes.
Ukrainian Network of Integrity and Compliance
Ukraine’s Business Ombudsman Algirdas Semeta has also been working on an initiative — the Ukrainian Network of Integrity and Compliance — to curb business corruption.
The effort unites companies willing to commit to integrity, ethics and the law.
There are 55 members today, with several new companies undergoing screening for compliance. An ethics committee monitors the behavior of companies and can remove a member.
According to Semeta, about 5 percent of the 3,241 cases submitted to the Business Ombudsman’s Council were rejected after investigation revealed that the companies involved were trying to evade taxes.
Companies accepted as members receive certification that they use for marketing purposes.
The initiative kicked off in May 2017 and is supported also by the European Bank of Reconstruction and Development and the Organization for Economic Cooperation and Development. However, the network has yet to appoint its leader.
“Corruption is really a complex phenomenon and it is not enough to just fight it from above,” Semeta said. “If communities, citizens, businesses do nothing and just look at what the state does, then it is actually very difficult to achieve positive results.”
Vladimir Kotenko, head of EY’s Tax and Legal Department, says that much of the responsibility still lies with government.
“What Ukraine really needs are state bodies which would be immune to political pressure,” such as an independent and competent anti-corruption court, he said.
“There are abundant tax loopholes available for businesses on the one hand and unfriendly tax administration on the other.”
While Semeta says Ukraine’s tax system has improved, more work needs to be done, such as in switching entirely to an electronic payments method, better training of tax officials and improved risk assessment.
He also wants tax officials to be held accountable for their actions.
Ukrainian Taxpayers Association
Ukrainian Taxpayers Association President Grigol Katamadze says that the tax code needs to be more predictable and not change so frequently. His organization represents 6,300 companies of all sizes.
His goal is to defend the interests of honest taxpayers who want to pay their taxes transparently.
“We want to create a system through which taxpayers will pay fairly, will not pay under the table, and where taxpayers and businesses will not constantly be under pressure of the government,” Katamadze told the Kyiv Post. “Changes in the tax code are done in a chaotic manner either during the end of every year or throughout the year. This is completely wrong.”
Katamadze, a former Georgian ambassador to Ukraine, said that he has been reviving the association that ran Hr 14 million in losses. He’s cut the losses and is ready to push for a less burdensome yet fairer tax code.
His views echo those of Ivan Miklos, an adviser to Prime Minister Volodymyr Groysman, and ex- Finance Minister Natalie Jaresko. All three want a simplified tax system where categories of taxes would be gradually decreased, consolidated or removed altogether.
Such changes, Katamadze said, would provide an incentive for companies to stop looking for ways to avoid taxes through illegal salary payments and offshore transfers.
“This will repatriate capital to Ukraine,” Katamadze said.
The state budget envisions national spending of $36.4 billion in 2018.
Ukrainian Economic Freedom Foundation
Another Ukrainian taxpayer advocacy group called Ukrainian Economic Freedom Foundation was launched in November 2015 and favors minimal taxes and government regulation.
Alyona Babko, the organization’s public relations director, said that government spending needs to be more transparent. “We want to understand where the money is going,” Babko said.
For example, the organization wants stores to include on every receipt the amount of tax for every product and not simply an overall tax, as it is currently done.
The organization lobbies to build public awareness through the media and schools.
“Our research revealed that more than 40 percent of Ukrainians do not understand at all how much they pay in taxes,” Babko said. “If people understand more about how much of their money is going to the government, then they will demand more from the government.”
In 2018, the government expects revenues of $33.6 billion. 
By Ilya Timtchenko
Original article is availvable here: http://bit.ly/2BRQ6fa 

Next case: Business Ombudsman Council: essence, functions and key acheivemetns