Tax Service statements are as unclear as the tax laws it seem

The Ukrainian tax laws, whilst recently revamped and somewhat easier to follow than they once were, are still a labyrinth set with multiple traps for the unwary.

That said, there is a very large proportion of Ukrainian society that simply ignore the tax laws at any given opportunity due to the varying shades of grey the cash economy of Ukraine works within.

Estimates of the black and grey Ukrainian economy range between 30 and 50% of GDP.  Very occasionally some “experts” will claim percentages even higher.  In truth nobody knows the exact figure as by the very nature of the black/grey economy, it is opaque and not transparent.

It is like trying to measure corruption on anything other than perception.  The vast majority of corruption never sees a courtroom and therefore cannot be accurately measured.  To do so by perception can be wildly inaccurate.

Anyway, the State Tax Authorities in Ukraine have stated that between January and July 2012, the Ukrainian courts considered 120,100 tax related cases.  That sounds a lot for a period of 212 days, even if they worked 7 days a week.  Almost 567 cases per day across the nation.

An incredible number even if they were all slam-dunk, home-run, open and shut cases - which many undoubtedly were given society’s complete disregard for the tax laws when and where ever possible.

The total revenue under the tax laws in question, UAH 146.7 billion.

It went on to say, quite unbelievably, that the 120.100 cases represented a reduction of cases by 14.5% on the previous year, but the reduced number of cases had actually increased tax revenue by 20.5%.

Somewhat disbelieving that any judicial system, even one that can be as corrupt as that of Ukraine, can deal with such a huge number of cases in such a time, I found a different statement from the State Tax Authorities relating to the same period.

This one stated that between January and July 2012, the State Tax Authorities had won 92% of the cases they brought before a court from the 42,500 cases they perused.  This recovered a total of UAH 26.6 billion.

Those figures would indicate that the sum total of cases brought by the tax authorities before a court in that period was in fact 200 each day (on the assumption the courts worked 7 days a week).

So the same authority has issued 2 statements referring to the same period of time which can be summarised as follows:

Cases brought, either 120,100 or 42,500.  Lost revenue recovered, either UAH 146.7 billion or UAH 26.6 billion.  Court cases per day, on the basis of a 7 day working week during this period, either 567 or 200 across the nation’s courts.

Only one statement provided a success rate of 92%.

Both lauded the new dispute resolution strategy via mediated settlements - which one can only assume are cases during this period that didn’t see the inside of a courtroom - and no figures were released in either statement that would indicate the number of such occurrences.

Maybe the difference between the cases stated and UAH billions collected in both statements are those that were settled by mediation and that one statement is far more accurate relating to the cases that actually entered a courtroom, whilst the other is more a glossary of the entire caseload during the January to July period?

All rather unclear - very much like the laws and their interpretation to be fair.