Experts of the Ukrainian Business Council have conducted performance analysis of the State Tax Service for 2019-2020. Analysis results are set in the Analytical Report.
Performance Analysis Report
State Tax Service for 2019-2020
ADMINISTRATION
Payment assurance controlled by the State Tax Service makes up 61.8% of the revenues of the Consolidated Budget of Ukraine.
The revenues (balance) to the Consolidated Budget of Ukraine in 2020 amounted to UAH 848.0 billion, which is 15.7% (UAH 115.1 billion) more than in 2019.
Revenues (balance) to the State Budget made up UAH 567.4 billion, which is 21.5% (UAH 100.5 billion) more than in 2019.
Payments (balance) to the general fund of the State Budget amounted to UAH 507.5 billion, and to the special fund – UAH 59.9 billion.
The indicative targets of the Ministry of Finance of Ukraine (general fund of the State Budget) were exceeded by 10.7% (UAH 49.2 billion).
From January to April 2020, revenues of the general fund of the State Budget amounted to UAH 137.5 billion, or UAH 11.7 billion less than expected (UAH 149.2 billion).
By comparison, from May to December 2020, revenues of the general fund of the State Budget amounted to UAH 370 billion, which is UAH 60.8 billion more than planned (UAH 309.2 billion).
In 2020, with a nominal GDP growth rate of +0.3%, total revenues grew by +13.5% and VAT by +36.8% compared to the same period last year.
STATUS/DYNAMICS OF VALUE ADDED TAX REFUND
VAT refund status = Amount of VAT refunded to the amount of VAT claimed for refund during the reporting period or Total tax refund arrears to the amount of tax paid to the budget
In 2020, UAH 264.8 billion of VAT was collected. Taxpayers were refunded UAH 143.1 billion against UAH 136.3 billion claimed for refund. VAT revenues (balance) amounted to UAH 121.7 billion.
By comparison, in 2019, these numbers were as follows: VAT paid (collection) – UAH 240.8 billion, claimed for refund – UAH 152.8 billion, refunded – UAH 151.9 billion. Revenues (balance) amounted to UAH 88.9 billion.
INCOME TAX
By the results of the State Tax Service bodies activity in 2020, the income tax amount to the State Budget made up UAH 95.8 billion, and demonstrated is a decrease by UAH 11.3 billion, or 10.5 per cent, compared to 2019. Failure to meet the indicative income tax target was caused by the tax base decrease due to the COVID-19.
Moreover, the Government approved the basic forecast macroeconomic and social development indicators for 2019 and 2020, expecting 15.1 per cent decline in profits of profitable enterprises in 2020 compared to 2019. As of 01 January 2021, the corporate income tax overpayment amounted to UAH 13.9 billion, which is UAH 4.8 billion or 25.7 per cent less than as of 01 January 2020.
LOCAL TAXES AND LEVIES
In 2020, the State Tax Service ensured UAH 31.7 billion in revenues.
Land tax:
2019 – UAH 28.68 billion; 2020 – UAH 27.20 billion, which is UAH 1.48 billion less compared to 2019.
Immovable propertyte tax:
2019 – UAH 3.68 billion; 2020 – UAH 4.18 billion, demonstrating increase by UAH 0.5 billion compared to 2019.
INDIVIDUAL INCOME TAX (IIT)
2019 – UAH 253.09 billion; 2020 – UAH 271.18 billion, demonstrating increase by UAH 18.1 billion compared to 2019.
ADMINISTRATION OF SINGLE SOCIAL SECURITY TAX WAS ENSURED
2019 – UAH 273.5 billion; 2020 – UAH 294.4 billion, which is UAH 20.9 billion more than in 2019.
UNIFIED CORPORATE INCOME TAX (THIRD AND FOURTH GROUPS)
In 2020, the total amount of the unified corporate income tax (third and fourth groups) made up UAH 10.4 billion, which is UAH 0.1 billion more than in 2019.
RENT PAID TO THE CONSOLIDATED BUDGET OF UKRAINE
UAH 41.7 billion, including UAH 6.7 billion to local budgets, was collected for subsoil use, transportation, special use of water, special use of forest resources, use of radio frequency resources; environmental tax and fees for the risk social and economic compensation for the population living in the observation areas.
Payment to the State Budget amounted to UAH 35.0 billion in rent payments and environmental tax, with the indicative targets being met by 96.7 per cent. Compared to 2019, the state budget revenues from rent payments and environmental tax decreased by 31.4 per cent, or UAH 16.1 billion.
EXCISE TAX
2019 – UAH 79.0 billion; 2020 – UAH 91.9 billion, which is UAH 12.9 billion more than in 2019.
EXCISE TAX REVENUES FROM GOODS PRODUCED IN UKRAINE
2019 – UAH 60.5 billion; 2020 – UAH 68.8 billion, demonstrating increase by UAH 7.9 billion or 13.1% compared to 2019.
STATUS/DYNAMICS OF TAX PAYABLE BY TAXPAYERS IN TERMS OF BASIC TAXES AND LEVIES; AGGREGATED DATA ON EXTENSION, INSTALMENT AND RESTRUCTURING OF LIABILITIES AND/OR TAXES PAYABLE, AS WELL AS WRITING OFF BAD TAX ARREARS
In January and December 2020, revenues to the State Budget in tax debt repayments made up UAH 37.3 billion, which is 3.6 times as much in the same period last year, and UAH 27.0 billion in December, which is 7.9 times as much in the same period last year.
The tax arrears to the Consolidated Budget reduced in January and December 2020 by UAH 19.7 billion, or 15.8%, while in the same period last year there was an increase of UAH 23.2 billion, in December 2020 the tax arrears were reduced by UAH 15.5 billion, which is 19 times as much in the same period last year (the reduction of the tax arrears made up UAH 0.8 billion).
In January and December 2020, UAH 3.4 billion was transferred to the budget as a result of paying off the mandatory state social insurance contribution, which is 1.5 times as much in the same period last year.
Tax arrears dynamics to the Consolidated Budget in 2019-2020:
as of 01 January 2019 – UAH 101.5 billion, as of 01 January 2020 – UAH 123.6 billion, as of 01 January 2021 – UAH 104 billion.
CONFLICTUALITY INDICATOR IN THE VERIFICATION WORK OF THE STATE TAX SERVICE
Number of checkouts appealed by taxpayers through the appeal and judicial procedures to the total number of checkouts (including scheduled, actual and unscheduled)
On 18 March 2020, moratorium on inspections was introduced.
During 2020, documentary inspections were held for:
• 0.7% of registered legal entities (8.7 thousand)
• 0.7% of registered individuals (self-employed) (13.6 thousand).
98% of all documentary scheduled inspections were efficient.
Based on the inspection results, in 2020, taxpayers were charged UAH 17.7 billion in additional payments. In general, most of the additional payments for which tax evasion was recorded were related to VAT and income tax.
The audit units’ contribution in 2020 made up UAH 2.3 billion.
Losses were reduced by UAH 13 billion.
Illegal VAT refund was reduced by UAH 2.4 billion.
REVENUES TO THE BUDGET AS A RESULT OF COURT CASES (UAH MILLION)
2019 – 1,400; 2020 – 6,000.
NUMBER OF COURT DECISIONS ISSUED BY COURTS OF DIFFERENT INSTANCES
2019 – 787; 2020 – 1,163, which is 1.5 times as much compared to 2019
DYNAMICS OF COURT PROCEEDINGS CLAIMED BY TAXPAYERS, WHICH WERE DECIDED IN FAVOUR OF THE STATE TAX SERVICE
2019 – UAH 22.1 billion; 2020 – UAH 22.4 billion, demonstrating increase by UAH 300 million compared to 2019.