Tetiana Ostrikova demands that the government should immediately eliminate the numerous infringements of the VAT payers’ rights

The first results of the introduction of a shutdown of a VAT invoices registration system have proved the shortcomings of the criteria defined by the Ministry of Finance for the detection of “risky” invoices, as well as the ill-preparedness of the State Fiscal Service’s IT systems, an e-office system, and the Medoc program to accept large amounts of electronic documents from VAT payers.
Tetiana Ostrikova is outraged by the fact that registration of tax invoices of bona fide taxpayers – real business – has been stopped. In most cases, the registration of their tax invoices has not yet been unlocked. “These are agricultural enterprises, enterprises of processing industries, national manufacturers, construction businesses, which buy raw materials with one UKTZED code (Ukrainian Commodity Coding System) while selling the end products or the result of construction work having a different UKTZED code,” notes Tetiana Ostrikova.
All of them now have fallen into the category of “risky” ones, because, according to the order of the Ministry of Finance, the discrepancy of codes classifies such operations as suspicious – automatically and without consideration of other factors. Since July 2017 the system of automatic blocking of “risky” tax invoices has been operating in full. Prior to this, for several months, the Ministry of Finance and State Fiscal Service had been testing it without a real blocking of operations. “How come that during the testing period they didn’t manage to notice that the system was not ready to be launched, the criteria of “riskiness” were not elaborate and could harm the real sector?” Ostrikova insists.
Accountants are complaining that it is impossible to submit documents either through the e-office system or through the “Medoc” program; the systems are not technically able to process large electronic documents. Therefore, the State Fiscal Service has nothing else to suggest than asking enterprises to bring their packages of documents in paper form. But the most important thing is that even those payers who were lucky enough to submit at least some documents might face unpleasant surprises. The Ministry of Finance’s Order #567 and the Cabinet of Ministers’ Resolution #190, which determine the operation of the tax invoices blocking system, contradict the Tax Code. In particular, the list of documents to be submitted by an enterprise for unlocking is not exhaustive, as indicated in paragraph 201.16.1 of the Tax Code of Ukraine, which means that there is a risk of unjustified expansion of the list of documents that a taxpayer must submit to “unlock” the registration of tax invoices. As you know, discretion of officials results in abuse and violation of the rights of entrepreneurs. This is also evidenced by such amendments from the government as “sufficiency of documents” and the right of the commission to assess whether the documents are compiled in accordance with the law.
Tetiana Ostrikova has appealed to the Ministry of Finance and the State Fiscal Service with an urgent request to respond to the violation of the rights of bona fide VAT payers, to adjust the technical part and operation of the software, to improve the criteria for blocking.
“We want the executive authorities to fight with offenders. However, honest enterprises should not suffer in this fight. If the system works incorrectly and blocks the work of bona fide medium-sized businesses, officials must admit it, urgently eliminate violations of the rights of tens of thousands of enterprises, immediately examine all the submitted complaints, improve the algorithm, criteria for defining risky invoices, and most importantly – ensure proper operation of the e-office system for the taxpayers to be able to file documents through it,” said Tetiana Ostrikova.

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