More than 80% of revenues to the regional budget are personal income tax, and due to the unsatisfactory work of the tax department in combating illegal employment and “minimizer” enterprises, Lviv region loses approximately UAH 250 million every month.
Andriy Godyk, the first deputy head of Lviv OVA, told about this today, August 25, during the briefing on the results of the interdepartmental meeting.
As he explained, personal income tax (PIT) is one of the budget-forming payments of the revenue part of local budgets. At the same time, the main part of the income of this payment is taken by the taxation of wages and other incomes of citizens.
“Personal income tax accounts for 70-80% of revenues for the budgets of territorial communities and the regional budget. 64% of personal income tax is allocated to the budgets of territorial communities, 15% of personal income tax – to regional budgets, 21% of personal income tax – to the state budget. For example: 81% of revenues to the regional budget of the Lviv region come from personal income tax,” said Andriy Godyk.
Therefore, countering illegal employment and “minimizer” enterprises should be among the priority tasks of the Main Department of State Labor and Employment in Lviv Region and the Main Department of State Labor in Lviv Region.
Despite the fact that in 2021 the Lviv OVA held 9 meetings of regional working groups and 96 district working groups on issues of legalizing the payment of wages and employment of the population, as of June of this year there are 3,275 enterprises in the Lviv region in which the average wage is lower than the legal of the established minimum – UAH 6,500, as well as 2,523 enterprises in which the average wage is close to the minimum wage.
“This is when the average salary in the Lviv region for March 2022, according to the data of the State Department of Public Service in the Lviv region, is UAH 14,196. Thus, due to unsatisfactory work on countering illegal employment and “minimizer” enterprises, the local budgets of the Lviv region receive approximately UAH 250 million less each month. And these are funds that could be directed to the socio-economic development of local communities, the needs of territorial defense, the Armed Forces, the preparation of shelters, and the provision of educational institutions. If we speak in the language of numbers, then this is 100 new “students” or 25,000 new bulletproof vests of the 5th class of protection or 1 “Bayraktar TB2”, – emphasized Andriy Godyk.
Despite the overall positive dynamics of personal income tax receipts, the indicative income of personal income tax to the local budgets of the Lviv region by the Main Directorate of the State Tax Administration in the Lviv region is not fulfilled.
Thus, for July 2022, personal income tax in the amount of UAH 140 million has not been received.
“Here there is no question of pressure on business, which is already in difficult conditions due to the objective reasons of martial law. First of all, we raised issues before the Tax Office and other controlling bodies regarding those business entities and those networks that abused the minimization of the payment of this tax last year. Martial law cannot be a tool for continued evasion on the part of businesses in terms of paying taxes or inactivity of the controlling body, if this is its direct function and they have all the tools for this,” added Andriy Godyk.
You can familiarize yourself with the presentation “Analysis of the situation with the payment of personal income tax, excise tax and salary payments of the SPD of Lviv region” by following the link.
According to the results of the meeting, an appropriate protocol mandate was given to all subjects related to this issue. If the issue does not move, the Lviv OVA will inform the Ministry of Finance and the Cabinet of Ministers of Ukraine about the problems of Ukraine.
It will be recalled that previously business entities have repeatedly appealed to the Lviv Regional Administrative Office regarding the unclear and non-transparent mechanism of activity of the Main Department of the State Tax Administration in the Lviv region in terms of making a decision on the reimbursement of VAT to one or another business entity.
So, last month, the head of the Lviv OVA, Maksym Kozytsky, raised the issue of the non-transparent mechanism of DPS activity in the Lviv region. It was about incomprehensible decision-making in manual mode regarding the reimbursement of VAT to one or another business entity.
Also, the head of the Lviv Region reported that the Lviv Regional Prosecutor’s Office established that a number of enterprises provided services to minimize tax liabilities and artificially generate tax credit to other business entities, by documenting financial and economic transactions, without actually carrying them out.