Revenue mobilization and horizontal functions and management

Component 3 “Revenue Mobilization” envisages strengthening the institutional and organizational capacity of the public financial management system in the implementation and implementation of a modern strategy to promote taxpayer compliance with tax laws; effective risk management; broadening the tax base, in particular by improving the exchange of tax information with other countries; harmonization of Ukrainian tax and customs legislation with EU legislation; and implementation of best international practices in the tax and customs areas. Component 4 “Horizontal Functions and Management” supports the public financial management system in Ukraine in developing and implementing modern methods of human resource management, including anti-corruption measures, adaptation and automation of work processes, and improved planning, implementation and monitoring of reforms.

More details

General meta

Strengthening the capacity to introduce and implement measures to improve tax discipline, as well as to harmonize Ukrainian tax legislation with EU legislation and international best practices.

Specific goals

Strengthening the capacity to expand Ukraine's tax base, in particular through improved exchange of tax information.

Main activity

Further improvement of customs procedures in line with the EU acquis and international best practices.

01 Component 3: Revenue Mobilization

02 Strengthen the capacity to implement a new tax compliance strategy and develop a compliance assessment mechanism through support:

drafting a new tax compliance strategy and implementing a comprehensive assessment mechanism and compliance indicators;
Developing a methodology for assessing tax compliance gaps;
introducing other measures to promote voluntary tax compliance and payment of taxes.

03 Strengthen the capacity to review and adapt business processes in the tax and customs administration through support:

developing a comprehensive business process for case management at the SFS;
improving the tax audit function, including e-audit and the development and updating of risk assessment criteria/models/tools;
improvement of the filing and payment function, including tax accounting and electronic services for taxpayers (electronic taxpayer account, single tax payment account, tax consulting system, call center, etc;)
improving the functions of tax debt refund and collection (e-VAT system, segmented tax debt repayment processes, etc.)

04 Strengthen the capacity to establish and operate the new financial investigation service through support:

defining the organizational structure, recruitment and role definition;
building capacity in the area of financial investigations;
Automation of key functions, provision of equipment;
facilitating recruitment and professionalization of staff.

05 Strengthen the capacity to expand the tax base in Ukraine, in particular by improving tax-related information flows through support:

implementation of the BEPS Action Plan (Base Erosion and Profit Shifting Plan);
analysis of opportunities to expand the property tax base;
identification of indirect methods of control over citizens’ incomes, access to bank secrecy;
regulating the control and taxation of e-commerce, including cross-border e-commerce;
ensuring effective tax administration of specific types of activities and industries;
automating the processes of identifying transfer pricing risks;
joining the OECD (Organization for Economic Cooperation and Development) Initiative on the automatic exchange of information on foreign financial accounts, implementation of Country-by-Country Reporting with foreign competent authorities;
providing technical assistance in the field of information reception procedures, data storage, data security and data protection;
preparing for the second round of the EOIR (Exchange of Information on Request) peer review at the Global Forum on Transparency and Exchange of Information for Tax Purposes.

06 Strengthen the capacity to harmonize customs legislation and regulations with EU legislation and international best practices, as well as to implement them through, inter alia, support:

Implementation of the New Computerized Transit System (NCTS), including legal support, establishment of an administrative structure and implementation of an NCTS-compliant national transit application based on the NCTS national transit application currently used by EU Member States, development of functional requirements, technical specifications and quality assurance of procurement of software development services;
establishing a system of financial guarantees for Ukraine, harmonized with the EU customs legislation;
harmonization of the customs legislation of Ukraine with the UCC (EU Customs Code) and relevant acts, as well as with the Regulation establishing the EU duty exemption system, support in the implementation of the recently adopted provisions;
harmonization of the customs legislation of Ukraine with the UCC and delegated and implementing acts (Regulations No. 2015/2446 and 2015/2447) on the implementation of the concept of Authorized Economic Operator (AEO).

07 Strengthen the capacity of the tax and customs administration to combat tax evasion and take measures to facilitate trade through support:

harmonization of the customs legislation of Ukraine with the UCC and its delegated and implementing acts (Regulations No. 2015/2446 and 2015/2447) on post-clearance control and customs audit;
application of the PEM Convention (Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin), determination of the status of origin of goods, application of EU tariff measures, etc;
implementation of the Strategy for the Development of the Customs Risk Management System;
strengthening the control capabilities of customs valuations of the Ukrainian customs.

08 Component 4: Horizontal functions and management

09 1. Support the reform of human resources management in PFM institutions in the context of public administration reform, namely the development and implementation of a modern HR policy (including the MoF HR strategy and the HR webpage on the MoF Intranet), a system of initial and ongoing training (including the MoF online training portal), and the development and implementation of internal security, integrity and anti-corruption policies;

10 To support institutional development in the context of public administration reform, namely through review of functions, review of business processes, adaptation and change management (including institutional and organizational reform of the State Fiscal Service);

11 Strengthen capacity for planning, monitoring, consultation and reporting on PFM reform;

12 Strengthen IT governance and IT project management capacities to support, inter alia, improved IOT interoperability and information exchange between the Ministry of Finance, the State Fiscal Service and the State Treasury Service;

13 Support the automation of functions in the PFM in accordance with the priorities set out in the PFM State IT Systems Development Plan through the procurement of IT equipment, IT solutions and IT development services, including but not limited to budgeting, accounting, treasury and expenditure control, revenue mobilization and trade facilitation, financial and economic crime investigation, public procurement, internal control and external audit, the online training portal of the Ministry of Finance and IT security.