The Security Service of Ukraine said it busted one of the biggest tax evasion schemes in the history of independent Ukraine.
The operation, which allegedly involved officials in several commercial banks and employees of the State Fiscal Service, had a turnover of about Hr 15 billion, $530 million, according to the SBU. This may have caused approximate losses of $88 million in unpaid value-added tax.
“In particular, they allowed customers to bypass automated risk assessment monitoring,” the SBU stated. “That’s how the attackers were able to exploit informational vulnerabilities of the state tax service’s telecommunication system and evade paying taxes.”
The operation ran out of Kyiv in 2019 and 2020 and involved more than 400 fictitious companies. The SBU said it conducted searches in the suspects’ homes and offices, finding more than 600 seals belonging to fake enterprises, offshore companies, notaries, tax authorities and local officials.
They also found many documents of financial and economic activities, passport copies and other evidence.
Suspects have already been charged, including a former state tax service employee, according to Illia Vitiuk, head of counterintelligence and information security at the National Bank of Ukraine.
The exact damages have yet to be calculated before the SBU can charge certain officials. “Notices of suspicion… will appear when we are allowed to carry out the checks,” Vitiuk said at a press conference.
Olga Oshytko, head of communications at the Ministry of Finance, which is in charge of the State Fiscal Service, said the ministry is not ready to issue a comment today and will most likely be able to talk about the case next week.
The scheme was part of a bigger global operation which the fiscal service had been blocking earlier, according to the SBU.
Tax evasion is a major problem in Ukraine where anywhere between a third and one half of business is in the shadows, according to legal experts. Tax lawyers estimated that the state loses tens of billions of dollars in unpaid taxes every year.
