Customs according to plan

“We are working on the exclusion from the foreign economic activities of bad faith payers and enterprises -“dead souls” – Serhii Tupalsky

Serhii Tupalsky, Acting Head of the Department of Customs Administration of the State Fiscal Service of Ukraine (SFS) commented to the “ZiB” statements about alleged failure to fulfill the plan for budget revenues and told about the factors affecting the amount of payments.

– Lately, there are statements have been made that SFS does not fulfill its plans for budget revenues. Is it true?

– In accordance with the Law of Ukraine “On the State Budget for 2018”, a plan for customs payments for the total amount of UAH 371.8 billion was established for the State Fiscal Service.

This figure is almost 18% higher than the actual budget revenues from customs in 2017, when more than UAH 316 billion was collected.

For comparison, the SFS got the indicative value for customs payments for 2017 from the Ministry of Finance at the level of UAH 284 billion. We surpassed it by about 12%. It means that, in fact, the Ministry of Finance has planned that customs payments in 2018 will increase by one third relatively to the planned targets in 2017. And let me remind you, this happens in conditions of the war in the East.

Now what is about the implementation of these plans. In January 2018, Ukrainian customs authorities collected UAH 27.1 billion. At that time the hryvnia rate was UAH 28.48 per US dollar. For comparison, in January 2017, customs administrated less than UAH 19 billion at currency rate of UAH 27.23 per US dollar.

At the same time, in the future, we observe the strengthening of the hryvnia from UAH 28.48 up to UAH 26.14 for the US dollar in April. And, simultaneously, the preservation of the tendency to exaggerate the indicators of the previous year.

If we tabulate these figures, we obtain the following data.

In total, in January-April 2018, the SFS customs authorities collected more than UAH 107 billion, which is UAH 13 billion or almost 14% more than last year for the same period of time. As for the exchange rate difference, then the weighted average rate both in 2017 and in the current year, for the first 4 months amounted to UAH 27.03 for the dollar. That is, we have unconditional increase in our indicators.

And if we had calculated the receipts of customs payments at the rate of the US dollar, laid down in the calculation of the State Budget for 2018 (29.3 UAH per 1 US dollar), we would of course have been able to say about an even greater increase in customs revenues – in the amount for UAH 9.2 bln.

However, we now have a rate of UAH 26. This is less than almost 12%. There are also some other factors that have influenced our performance in the first quarter.

But in any case, it’s not about the collapse of customs duties. On the contrary, we observe a positive dynamics of customs payments.

– You indicated that there are other factors that influenced the receipt of customs payments. What exactly are you talking about?

– In fact, there are quite a lot of such factors. Therefore, I will give only the key ones that had the greatest impact.

First, during the 4 months of the current year, Ukraine has reduced the volume of oil imports. Only because of this we have not received about UAH 3 billion of customs payments or about 3% of their total volume (UAH 107 billion).

In addition, an embargo with the Russian Federation and anti-dumping measures had the effect on the receipt of customs payments. For the same 4 months, the total amount of losses due to this was about UAH 0.5 billion.

Also, the amendments to the Tax Code of Ukraine regarding the provision of installments for the payment of VAT payments when importing equipment in Ukraine came into. And these are complete objects, equipment for industry, etc., which have a significant import price.

But one should also understand that the customs function is not only fiscal. The main function of the customs is the protection of the country’s economic security and the fight against smuggling in its broadest sense. And those who now level accusations of shortage of customs payments against the SFS or simply do not understand the functions of the customs, or are not aware about a reliable situation about the economic state of Ukraine`s development, or deliberately try to focus society’s attention on the implementation of the plan without a comprehensive assessment of revenues.

– Does the SFS of Ukraine plan any additional measures to increase customs payments in 2-4 quarters of 2018?

– The issue of accomplishing budgetary tasks is one of the priorities in our work. We analyze daily the efficiency of the current work of customs, look for additional reserves and we are fighting tax evasion schemes.

In particular, we are now setting up customs to ensure efficient economic components of customs procedures. These are the declaration of goods by their name, the control of compliance with the quantitative and weight indexes of goods, customs value of goods, country of origin, etc.

Also, recently, according to the results of the analysis, the SFS has submitted proposals for a legislative settlement of the issue of overcoming existing tax evasion schemes and takes comprehensive measures to ensure the filling of revenue part of the budget.

For the same reason, we have formed a comprehensive action plan to combat various schemes for minimizing payments at customs.

First of all, this is the installation of scanners at customs. We also plan to introduce some IT innovations, in particular for data analysis, to create a department that will monitor online statistics on prices for various goods, etc., almost online.

Simultaneously, a number of schemes for substitution of goods were eliminated, measures were taken to strengthen control over the definition of the actual value of a number of budget-forming goods, control over the provision of tax benefits, and appropriate checks were carried out. And the funds from the post-audit activities are already going to the budget.

In addition, we are negotiating with our colleagues from other countries about the electronic exchange of information on the authenticity of documents provided during customs clearance. As a result, we also expect positive changes in terms of exclusion from the foreign economic operations of bad faith payers and enterprises – “dead souls”.

Now I cannot “put all cards on the table”, but I declare responsibly that in the near future we will begin to implement a number of other relevant measures.

And I want to emphasize that most likely, these actions will affect the customs payments not immediately. In economic processes, results are always somehow delayed in time – for 6 months – a year. But the fact that the fight against schemes and smuggling will have a positive effect on the Ukrainian budget in the medium term, I have no doubt.

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