Almost 51% of importers of medicines had no licenses to import medicines based on the results of January-September 2023.

As the Accounting Chamber reported based on the results of an audit of the effectiveness of planning, accrual and receipts of VAT on operations for the import of medicines and medical products into the customs territory of Ukraine, in the absence of control by the State Customs Service in 2021, almost 70% of importers did not have such licenses, in 2022 - 59%.

"The State Service on Medicines and Drugs Control did not check such entrepreneurs. As a result, there are risks of selling low-quality, counterfeit medicines on the Ukrainian market," the chamber notes.

According to auditors, during random checks of customs declarations at Volyn, Dnipro, Lviv and Odesa customs, 46 cases of unjustified application of the 7% VAT rate and unjustified application of certain VAT tax benefits were identified, as a result of which almost UAH 24 million were not received into the state budget.

Moreover, at Lviv customs, when taxing VAT on imported goods under the same code, different rates were applied - 7% and 20%, as a result of which "there is a risk only due to the established fact of a shortfall of UAH 70 million to the state budget."

The auditors in the report also noted the risks of production and circulation of counterfeit, low-quality, expired medicines and medical products due to the unlawful use of VAT tax benefits by taxpayers.

"After the introduction in March 2022 of a moratorium on inspections by the State Service of Ukraine on Medicines and Drugs Control, inspections decreased sixfold (compared to 2021), the level of fines increased from 16.3% to 33.3%. The number of inspections of the quality and safety of medicines in 2022 and January-September 2023 decreased by more than four times compared to 2021, the volume of accrued fines in January-September 2023 increased by almost 19% compared to the annual figure for 2022," the auditors cited statistics.

The auditors remind that during 2021-2022 and nine months of 2023, the pharmaceutical industry was supported through complete tax exemption for certain types of transactions on these goods, as well as a reduced VAT rate of 7%. Benefits were provided for UAH 28.2 billion.

"The corresponding incentives slowed the rise in prices for pharmaceutical products, but their effectiveness was low," the auditors noted.