Tax Risks in Ukraine: New Control Tool or Shadow Political Play?
In recent years, Ukraine has intensified efforts to modernize its tax system and implement cutting-edge technological tools for monitoring and managing tax risks.
Although the official goal is to increase transparency and reduce the shadow sector of the economy, the reality points to a significant lack of openness in the implementation of these innovations.
For over a year, an experimental compliance management system has been in development as part of Ukraine’s national income strategy until 2030, yet details and results remain largely undisclosed.
At times, it appears that this system functions merely as a façade to evade responsibility and mask political and financial interests rather than serving as an effective instrument in combating tax evasion.
Against the backdrop of limited informational transparency, concerns are growing that fiscal authorities might be avoiding accountability by employing risk-based checks that could be misused to pressure businesses and citizens.
Repeated announcements and declarations reveal a lack of clear strategic communication, which erodes trust in government agencies.
Meanwhile, inter-agency cooperation agreements, such as between the State Tax Service, Financial Monitoring, and the Bureau of Economic Security, demonstrate a desire for closer coordination in fighting financial crimes and tax evasion, though the tangible outcomes of such collaboration are yet to be assessed.
Historically, successes in recovering damages and criminal prosecutions appear to mirror the scale of Ukraine’s shadow economy, which experts estimate at hundreds of billions of hryvnias annually.
This raises the question: is the system’s implementation purely symbolic? Given the limited results and lack of detailed reporting, it seems that the real political will and institutional capacity to create transparent mechanisms for combating economic shadow activities remain elusive.
Meanwhile, efforts to make bureaucratic processes digital and automated appear inconsistent with the opaque nature of current reforms, prompting skepticism about their true effectiveness and motives.