Lubov Korenchuk is tortured by an obsession that has driven her to seek out a support group. Each week, she meets with 40 fellow sufferers in central Kyiv to swap stories, ask questions, exchange tips and, most importantly, vent frustration.
Like the others, Korenchuk is an accountant. Her nemesis is the Ukrainian tax system.
‘Ukrainian accountants must toss logic out the window, because the moment they start thinking tax laws are logical, Ukrainian accounting stops. All our laws are illogical,’ she said.
Sadly, no known 12-step program promises to diagnose the tax code’s contradictions, kick the authorities’ addiction to retroactive changes or cure the chronic information deficit that turns tax calculations into guesswork. All Korenchuk can do is mark the symptoms. ‘I’ve walked into the tax inspector’s office and have seen accountants who look like they’ve gone mad. They have these lost, desperate eyes,’ she said.
The chief accountant at the U.S.-based telecommunications company Golden Telecom, Korenchuk has been at this game for 10 years. In that time, she says, things have gone from bad to worse.
Take the passage last year of new laws setting a 20 percent VAT and a 30 percent corporate income tax, the cornerstones of government-sponsored tax reform.
No one bothered to inform accountants when the changes would take effect. Neither were they given instructions for completing the new tax forms.
‘Accountants didn’t know what to do. We were told about the law, but it wasn’t implemented. It was like sitting on a mine,’ Korenchuk said.
She went ahead and completed her company’s third-quarter reports based on the text of the laws that had been published. But by the time Parliament put finishing touches on the legislation in October, the text had changed, and the changes were retroactive. As they have been forced to do many times before, Korenchuk and her colleagues had to redo all their reports.
‘Crazy laws like these just torture accountants,’ she said. ‘Every day it is changing. I can’t just be thinking about what happened yesterday, but about what authorities can pull on me tomorrow.’
Ukrainian tax inspections are rarely announced, and there is no clear-cut list of fines for mistakes in a company’s books – beyond that devised on the spot by the tax inspector.
On numerous occasions, Korenchuk has visited the tax inspector’s office to get information on new laws or changes to old ones, only to be told by the authorities that they didn’t know themselves. A few days later, however, the tax police would repay the visit and fine her company on the spot for failing to compile reports based on new laws.
‘Accountants are unprotected,’ said Korenchuk. ‘That is the hardest and most frustrating thing for me to deal with.’ Despite the headaches and the fraying nerves, Korenchuk doesn’t regret becoming an accountant. She just wished Ukraine would adopt the international standards that simplify the task of accountants abroad.
‘Something such as GAAP [Generally Applied Accounting Principles], which is very visual and very easy to handle, would be nice,’ she said. ‘We don’t need to reinvent the wheel.’
Until that happens, accountancy here will remain a field much more exciting than it should be.
‘I honestly believe that any person thinking about becoming an accountant in Ukraine should go through psychological testing first,’ Korenchuk said.
