Upon request of Minister of
Finance Oleksandr Danyliuk, the State Fiscal Service has issued an
executive order on July 20 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.
Solution
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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