IMF opposes MPs' amendments to VAT refund system
The International Monetary Fund (IMF) is concerned about deputy amendments to the VAT refund system, according to a letter by IMF Resident Representative in Ukraine Goesta Ljungman to Verkhovna Rada Chairman Andriy Parubiy and Prime Minister Volodymyr Groysman, which was published on Facebook by MP Andriy Zhurzhiy.
"We are concerned about bill 7115, currently under consideration in parliament, which, if adopted, will replace the electronic verification system with the right of the regional inspectorates of the State Fiscal Service to decide at their discretion whether or not to suspend tax bills. Thus, the bill turns in the opposite direction the modernization of the system for administering VAT refunds, deals a blow to SFS's institutional integrity and risks the restoration of malicious practice of debt on VAT refunds," the letter says.
As reported, according to the amendments to the Tax Code adopted in late 2016, the automated tax invoice registration system started working in the single register of tax invoices from July 2017. At the same time, the State Fiscal Service has the right to refuse registration on a number of criteria for assessing the degree of risks.
Over the first ten days of its work, the system blocked 1.1% of tax invoices. Since then, the State Fiscal Service has noted a reduction in this figure. As of September 1, there were 201,000 blocked tax invoices, or 0.5% of the total number.
Referring to the complaints from businesses, the parliament's committee on tax and customs policy drafted a bill on returning the automatic tax invoice system to the test mode. The bill, in particular, provides for granting the right to the heads of the main offices of the State Fiscal Service to apply the procedure for blocking tax invoices in a number of cases.
The draft law was registered in the Verkhovna Rada. Prime Minister Groysman and Finance Minister Oleksandr Danyliuk opposed the introduction of such changes, emphasizing that this will trigger a return to corrupt schemes of VAT refunds.