​Deputy Minister of Finance S. Verlanov met with business representatives to discuss the acute issues of tax policy

10/17/18

On October 16, 2018, Deputy Minister of Finance S. Verlanov met with representatives of 25 business associations and sector associations to discuss important issues concerning the tax policy. The agenda of the meeting included concrete steps in the SFS reform, implementation of the BEPS, approval of the FATCA Agreement, implementation of the distributed profit tax, further simplification of the registration procedure for cash registers etc.

During the meeting, Deputy Minister of Finance S. Verlanov explained the basic principles under which the SFS will be divided into three equally functional units responsible for tax administration, administration of customs payments and investigation of financial crimes. Also, it is important now to demilitarize the tax administration and to remove barriers for tax payers.

S. Verlanov also commented on the further steps of Ukraine towards the implementation of the BESP Plan and adoption of the FATCA Agreement (Foreign Account Tax Compliance Act): “Jointly with the National Bank, the President Administration and the Parliament’s tax committee we are now finalizing the draft law which we will publish for an open discussion soon. It is crucial to adopt it as soon as possible, since it stands for Ukraine’s commitment concerning macro-financial aid from the EU. Also, we are looking forward to the adoption of the FATCA Agreement this Thursday”.

The Deputy Minister pointed out that it is important to take into account all risks during the implementation of the distributed profit tax. The Ministry of Finance is now checking options which will not be affect the financial security of Ukraine.

In the end of the meeting, Sergiy Verlanov added: "the Ministry of Finance is open to develop the dialogue with business. We are working together now, since it is difficult to implement important reforms in our country on its own".

Representatives of business associations actively discussed issues that are most interesting to them

“I was pleasantly surprised by the new format of the meeting with the Ministry of Finance. We had two hours and a half of intensive work. The agenda included general issues relevant for most companies as well as sectorial ones that are crucial for some of the economy sectors. The organizers had selected issues that are most worrying for business now. It was a thorough preparation indeed that was perfectly done by the reform office of the Ministry of Finance. I highly appreciate the special attention for private pension providers, the understanding of its social importance and, accordingly, its vulnerability. I am especially grateful to Deputy Minister Sergiy Verlanov for his readiness to act straightaway to solve a number of issues concerning the state regulation of this sector. We had a real dialogue at this meeting. It seems to have been the first time that we had such a fruitful meeting with the Ministry of Finance. I am confident that the further work proposed by Sergiy Verlanov to handle more specific issues concerning non-state pension insurance jointly with the expert council of the Ministry of Finance will be equally successful," said Tetyana Salnikova, Head of the Council of the Ukrainian Association of Pension Fund Administrators.

Yuriy Peroganych, General Director of the Association of Ukrainian IT Companies, member of the Ukrainian Business Council, noted the importance of the Ministry of Finance attitude, which considers transparency and consultations with key stakeholders, including business, as its priorities.

“It was interesting to hear the “direct speech” regarding the fiscalization of trade operations (first of all, operations with imported goods) and to become confident that the Deputy Minister is keen to stop illegal trade with smuggled goods in Ukraine. I am grateful for this opportunity to express my opinion on the damage for the economy inflicted by duty-free imports which are favorable for foreign manufacturers compared to the Ukrainian ones, hamper investments and employment in the manufacturing sector, affect the trade balance and triggers inflation,” he said.

Tetyana Prokopchuk, Vice President of the US Chamber of Commerce in Ukraine, emphasized that the Chamber also values a regular dialogue and regular meetings with the Ministry of Finance.

“Taxation and customs issues are always in the spotlight among our member companies. The proposed format of meetings enables business representatives to raise and to discuss relevant issues. Thus, it was important for us to articulate taxation issues which are now most relevant for business – establishment of the Temporary Register of VAT Refund Applications and international tax issues. Also, the Chamber has a number of proposals concerning the customs policy which have been recently published in the contribution “Guiding Principles for the Customs in Ukraine”. We are ready for further cooperation,” Т. Prokopchuk said.

The Ministry of Finance intends to continue the dialogue with the business community in the new format. Next meetings will be announced through the official communication channels of the Ministry.

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