The Government Made Decisions to Implement the Concept of a Single Legal Entity for the State Tax Service and the State Customs Service

Today the Cabinet of Ministers of Ukraine adopted several decisions to ensure the functioning of the State Tax Service of Ukraine and the State Customs Service of Ukraine in the format of two single legal entities.

The concept of a single legal entity for the State Tax Service and the State Customs Service is a positive generally accepted European practice, which is implemented in Ukraine in accordance with previously adopted laws, as well as implementation of the structural benchmark within the current IMF Program.

The following deceisions were made:

• to dissolve territorial bodies of the State Tax Service as separate legal entities and to establish separate subdivisions of the State Tax Service (without the status of legal entities);
• to reorganize territorial bodies as separate legal entities into separate units of the State Customs Service.

Positive aspects of the functioning of the State Customs Service and the State Tax Service according to the model of a single legal entity are the following:

• strengthening institutional capacity of State Tax Service and State Customs Service,
• establishment of management hierarchy,
• optimization of administrative, personnel and other resources to strengthen the security function of the state (improvement of the risk analysis system, development of new IT solutions),
• upgrade of Human Resources through the implementation of a program assessing staff qualifications and reliability,
• establishment of single approach in recruitment, strategic management, information policy anti-corruption management.

Thus, the creation of a single legal entity for each of these services will allow to introduce effective organizational structures of the State Tax and Customse Services, built on the functional principle, as well as to introduce new digital services, which will reduce time and money costs for bona fide business.

Reference:
The functioning of the State Tax Service of Ukraine and the State Customs Service of Ukraine in the format of two single legal entities is provided for in the third paragraph of subparagraph "g" of paragraph 1 of Article 1 of the Decree of the President of Ukraine of November 8, 2019 № 837 "On urgent measures to reform and strengthen the state" and Memorandum on economic and financial policy with the International Monetary Fund (deadline for the implementation of the structural benchmark  is January 1, 2021).
Laws of Ukraine of January 16, 2020 № 466-IX "On Amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation" and January 14, 2020 № 440-IX "On Amendments to the Customs Code Of Ukraine and some other legislative acts of Ukraine in connection with  the implementation of administrative reform" provide an opportunity to form territorial bodies of central executive bodies which implement state tax and customs policy, as separate units with the necessary powers.