The VAT-related risk assessment system was launched to prevent the misuse of VAT funds. It is an integral part of the automated VAT refund procedure.
From the very beginning, the Ministry of Finance was aware of possible risks regarding the operation of the system and developed solutions promptly to improve it.
Despite all efforts, the system still poses an administrative burden on business and blocks a certain number of tax bills from the real sector of economy due to gaps in the system’s implementation. It seriously affects the operations of diligent companies.
During the meeting on December 6, Minister of Finance Oleksandr Danyliuk discussed five possible scenarios with representatives of the business community regarding amendments to the risk assessment system proposed by the Ministry of Finance, the Parliament’s committee, experts and business. Each of them has its benefits but also has some risks.
During the meeting, representatives of small and medium-sized business expressed their thoughts on the further system operation, but could not reach a consensus.
To protect diligent business from losses, the Ministry of Finance and the Parliament’s committee jointly decided to stop the operation of the VAT-related risk assessment system to have time for developing a solution jointly with experts, business and members of Parliament which shall not pose major risks for all business sectors and at the same time serve as an effective tool to tackle VAT fraud.
This decision was supported by the Parliament of Ukraine.