Ukraine’s Government Approves Draft Laws Aimed to Meet the IMF’s Recommendations Regarding the Reform of the State Fiscal Service


Following the proposal of the Ministry of Finance, the Government has approved draft laws meant to implement the IMF’s recommendations regarding the reform of the State Fiscal Service (SFS).

The Ministry of Finance is actively working to implement institutional changes regarding the State Fiscal Service which would significantly improve the quality of public services for citizens and business and help remove biased approach and corruption opportunities in the operations of the tax and customs authorities.

Pursuing this target, the Ministry of Finance has been reforming the SFS since June 2015. This reform was agreed with the IMF and approved by the Government; the reform is actually a route map for the reform strategy of the SFS for the next two years.

One of steps envisaged under the reform is to establish regional SFS units with the respective local customs offices and tax inspections reporting to them. That would allow to optimize the local SFS units and to reduce the number of its employees (draft Law of Ukraine No. 2177a “On amendments to the Customs Code of Ukraine regarding the optimization of the local units of the State Fiscal Service”).

One more draft law approved by the Government is aimed to simplify the procedure for filing administrative protests by taxpayers regarding their tax liabilities by introducing a one-level processing system. According to this, these protests will have to be handled by the central SFS office only, which shall simplify and speed up the processing of taxpayers’ claims (draft Law of Ukraine No. 2178а “On amendments to the Tax Code of Ukraine aimed to minimize influence of budget revenue administration”).

Also, it was decided to increase the number of deputy heads for some of the state bodies based on their functions. In line with the IMF’s recommendations and with the purpose of implementing institutional changes in the SFS operations, five functional areas in the SFS operations were defined which must be assigned to the same number of deputy heads of the SFS (draft Law of Ukraine No. 2176a “On amendments to article 19 of the Law of Ukraine “On central bodies of executive power” regarding deputy heads of central bodies of executive power”).

Thus, these draft laws shall contribute to transforming the SFS from a controlling authority to a service-oriented public body as well as to implementing requirements related to the cooperation with the IMF.

The draft laws approved by the Cabinet of Ministers were withdrawn from the Parliament due to the change of the Government and will be re-submitted to the MPs after their approval by the new Government. The Ministry of Finance expects the Parliament to support the above draft laws.

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