Customs rules upgraded
Experts see lots of loopholes
The Verkhovna Rada (VR) of Ukraine has passed Bill No. 8130-d in the first reading. This bill envisages amendments to the Tax Code of Ukraine, numbering 386 pages, including several clauses which merit a closer look.
To begin with, there is the clause with the “institution of a [duly] authorized business entity” (“economic operator” in the original text). Also, the customs clearance procedures are reduced to four hours after submitting a declaration. The customs officials are required to adopt a clear method of determining the cost of the goods under consideration, proceeding from the sum stated in the contract.
The new Customs Code introduces the notion of post-audit control, empowering customs authorities to verify import taxes after customs clearance. This clause gave rise to heated debate at the VR committee, Leonid Kozachenko, chairman of the Cabinet’s Council of Entrepreneurs, told The Day. He said that in the end they agreed to apply this clause only in regard to businessmen entitled to tax benefits/concessions when crossing the border. Kozachenko believes this procedure will lower the risk of using the simplified customs clearance procedures, so as to pay less than the actual cost: “When a business entity is entitled to apply the simplified customs clearance procedures and pays the required sum when crossing the border, without being terrorized by the customs authority, then the customs authority is likewise entitled to check that entity’s products within a year and check the sums paid as customs duties. This is what this post-audit control clause is all about.”
Customs procedures are also simplified for individual entrepreneurs. One is allowed to import goods worth up to 2,000 euros without declaring them (10 times the previous amount). This sum isn’t large for Ukraine and this procedure is sure to make life easier for a Ukrainian who buys a Notebook abroad and brings it to Ukraine, says Kozachenko.
Another piece of good news for domestic business, according to Kozachenko, is that the new Customs Code provides for the customs officials’ legal responsibility, so that any damage done to any business entity in the course of customs clearance procedures can be claimed in a court of law, and [if so ruled by the court] recompensed at the expense of the central budget.
Vitalii Khomutynnik, chairman of the VR finance and banking committee and one of the authors of the customs amendments, says the document has been coordinated with the State Customs Service of Ukraine, that it conforms to the clauses of the Customs Code, and that the new wording of the code will be adopted by the end of the summer, so it can become legally effective in 2012.
Says Oleksandra Kuzhel, second in command of the Strong Ukraine Party and former chairperson of the Derzhpidpryiemnytsvo State Committee on Government-Run Enterprises: “We received the final version of this document last night and we’re studying it. Previously, there were 10 clauses we challenged in regard to the customs authorities, namely the list of documents required for customs clearance, determining the customs duty, the customs officials’ responsibility for illegitimate acts, the notion of contraband, and the kinds of mistakes made in the course of customs clearance procedures.” Kuzhel said she would submit the findings next week.
Viktor Lysytsky, first vice president, Ukrsudprom Shipbuilders’ Association of Ukraine, complains about the Customs Code: “They have never allowed us to discuss any proposals we made… We were shocked to see Bill No. 8130-d passed in the first reading: none of our proposals were taken into account and it may bring a quick end to the shipbuilding industry.” He told The Day that Ukrsudprom had asked the authors of the bill to let them have a customs tax holiday until January 1, 2016, so they could make critical imports — buying goods that are not manufactured in Ukraine to build vessels, make repairs, and upgrade sea, river and other craft. This proposal was ignored and they also deleted the Customs Code clause regarding the special ad hoc import customs treatment. Lysytsky says this clause exempted certain businesses from custom taxes as with, for example, repairing foreign ships.
