The State Tax Service, in compliance with the recommendations of the Accounting Chamber, has strengthened control over the registration of taxpayers

Improving the taxpayer accounting system, particularly in the regions, can contribute to increasing tax revenues to the state budget.

The Ministry of Finance of Ukraine and the State Tax Service of Ukraine, in response to the recommendations of the Accounting Chamber, have taken major steps to improve the electronic taxpayer accounting system and centralized maintenance of registers and databases, and the main departments of the State Tax Service have strengthened control over the registration of taxpayers.

In 2023, during the performance audit of the exercise of powers by executive authorities in the field of registration and accounting of taxpayers, auditors identified a number of shortcomings. In particular, the information and communication system (hereinafter -ICS) "Tax Block" was limitedly available to territorial bodies of the State Tax Service. Therefore, they did not have the opportunity to analyze the completeness of accounting for taxpayers, objects of taxation and objects related to taxation. In addition, reports generated on the basis of the system did not contain exhaustive data, and individual data were not consistent with each other. Also, the reporting forms did not provide for accounting for taxpayers by type of activity or taxation systems and accounting for taxpayers who were in temporarily occupied territories, etc.

To eliminate the identified shortcomings, by orders of the Ministry of Justice of Ukraine and the Ministry of Finance:

– amendments were made to the Regulations for the submission by the Ministry of Justice of information necessary for ensuring the accounting of taxpayers, as well as the calculation and collection of taxes and fees;

– the Procedure for electronic information interaction between the Unified State Register of Legal Entities, Individuals – Entrepreneurs and Public Formations and the information systems of the State Tax Service was improved.

In order to eliminate discrepancies between the total number of legal entities and individuals – entrepreneurs in terms of the status of the payer, organizational and legal forms and their general summary, the State Tax Service order improved the reporting on the accounting of taxpayers.

The State Tax Service also approved applications for the improvement of the software of the ICS "Tax Block". Currently, the improved software in terms of improving the change of place of accounting for production sharing agreements, joint activity agreements, and property management agreements is being used in testing mode. The finalization of the ICS also concerns the improvement of metrics regarding the correctness of individual taxpayer registration data and taxpayer registration.

In addition, during the aforementioned audit, it was found that the ICS, in particular, lacks up-to-date information about taxable entities. For example, almost 18% of taxpayer accounting files in the Dnipropetrovsk region contained outdated or erroneous information about their main type of activity. And the territorial bodies of the State Tax Service did not provide effective control over the timeliness of registration or registration of taxpayers.

The Accounting Chamber was informed about the elimination of the identified violations by 11 control objects – the main departments of the State Tax Service in Dnipropetrovsk, Kyiv, Lviv, Odessa, Poltava and Kharkiv regions, the city of Kyiv, the Central, Eastern, Western and Southern interregional departments of the State Tax Service for work with large taxpayers. In order to implement the recommendations provided, they, in particular, carried out reconciliations of taxpayer registration data with data obtained from the Unified State Register of Legal Entities, Individuals - entrepreneurs and public organizations, in order to streamline information on types of activity, and also eliminated discrepancies in the formation of the report "On the Status of Taxpayer Registration".

Based on the results of reviewing the information provided by the objects of control, the Accounting Chamber concluded: the recommendations have been generally implemented by the institution, therefore, control over their implementation has been completed.