The Ministry of Finance and the State Fiscal Service find a fast solution for one of key problems affecting business


Upon request of Minister of Finance Oleksandr Danyliuk, the State Fiscal Service has issued an executive order today which is meant to solve one of key issues for business. Regulations set by this order shall significantly reduce the number of criminal proceedings against business.

What is the problem?

The State Fiscal Service used to initiate criminal prosecution based on the results of tax checks which could be disputed at the court. In most cases, no evidence for criminal actions could be retrieved. According to the data of business ombudsman Algirdas Shemeta, 1748 criminal proceedings were started in 2015 with only 55 of them being passed to the court with formal charges. The State Fiscal Service detected several dozen felons only, but more than 1.5 thousand innocent businesses were affected its investigations.

This issue was raised by business representatives at a meeting which took place on July 12. The Minister of Finance ordered the Head of the SFS to settle it.


From now on, the tax police will be only receiving tax check files upon completion of all administrative and court opposition procedures. Hence, criminal prosecution will only be started, if there is real evidence for criminal actions.

It means that the SFS won’t be able to put business under pressure for no reason, if there is no proof for felony. If an entrepreneur does not agree with the SFS decision on his tax liabilities and files a protest at the court, criminal prosecution can only be started, if the investigator in charge finds real evidence for criminal action.

What is the benefit?

This solution shall significantly reduce the number of unauthorized criminal proceedings against business and improve the business environment.

What next?

The situation must be settled completely and in a systemic way through the comprehensive reform of the SFS which is being elaborated by the Parliament’s committee for tax affairs, the Ministry of Finance and experts. The next step will be the liquidation of the tax police and the creation of a new agency for financial investigations which, contrary to the tax police, will be focused on analytical work and service.

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