Last week, the system of tax invoices blocking resumed its operation. “The consequences of its work in 2017 were so terrible for Ukrainian small and medium-sized businesses that in December the Verkhovna Rada was forced to unblock the blocked invoices and suspend the system for several months,” says people’s deputy representing Samopomich parliamentary faction Tetiana Ostrikova. “And now the government has adopted a resolution on a new order for blocking the tax invoices and, accordingly, on resuming the system of blocking under the slogan of an alleged fight with and overcoming of the fraudulent VAT credit and bogus enterprises.”
However, according to the MP, even in its present form the automated system is not able to catch tax fraudsters and distinguish them from a regular payer. The economic consequences of this are devastating for businesses.
For example, a representative of a wholesale oil products company informs, “The system is completely blocking the work. I cannot pay taxes, pay salaries. Customers are leaving. As a result, the enterprise is completely at a loss.”
A representative of service industry adds, “The system is just killing small and medium-sized businesses. Many enterprisesare suspending their work.”
According to a representative of the company which deals with the trade and production of work clothes, they are considering the possibility of moving and reducing business. She says, “We buy raw materials, we sell finished products. Of course, the input and output codes do not match. In a busy working month I have up to a thousand tax invoices. It takes a half-day of intensive work of one accountant to unblock one tax invoice. How many people need to be recruited to file all these documents? Last year, we closed one business line, because a huge investment in both production of products and the registration of a tax bill before the buyer pays made the work of this direction impossible. Now we are deciding what to do next with our business – to close it down, to move to other countries or to stay here, providing the people who make decisions will be ready to work for us, for the benefit of the businesses working in the real sector.”
Tetiana Ostrikova concludes, “These stories of entrepreneurs are the stories of failure of this government and failure of the current tax policy of the government. The system of monitoring and blocking of tax invoices can be used exclusively for analytical and information purposes, as a certain indicator of risk for the tax authorities showing that it is necessary to pay attention to the activities of a certain enterprise. But in no case should it be used to block the registration of the invoices, because this tax credit is the unconditional right of the payer, which is secured by the payment of “ready” funds to the special VAT account in the treasury for the registration of the tax invoice.”