Revenue mobilization & Horizontal functions and governance

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 mobilisation

02 Strengthen capacities in introducing and implementing a new tax compliance strategy and developing a compliance measurement framework through support to:

drafting of the new tax compliance strategy and implementation of comprehensive compliance measurement framework and indicators
developing of tax gap assessment methodology
introduction of other measures to promote voluntary compliance and payment of taxes

03 Strengthen capacities in the review and adaptation of business processes within the tax and customs administration through support to:

developing of a comprehensive case management business process at SFS
improving of tax audit function, including e-audit and development and update of risk assessment criteria/models/tools
improving of filing and payment function, including tax accounting and electronic services to tax payers (Taxpayer’s e-Account, single account for tax payments, tax advisory system, call-centre, etc.)
improving of refunds and tax debt collection functions (E-VAT system, segmented tax debt repayment processes, etc.)

04 Strengthen capacities in establishing and operationalising the new financial investigation institution through support to:

defining organisation structure, recruitment of staff and definition of roles;
capacity building in financial investigation;
automation of key functions, provisions of equipment;
facilitating the recruitment of staff and its professionalization.

05 Strengthen capacities in broadening Ukraine’s tax base through, inter alia, improved tax-related information flows through support to:

implementation of BEPS Action Plan;
analysis of opportunities for expanding the property taxation base;
determining indirect methods for control of income of citizens, access to bank secrecy;
settlement of issues of control and taxation of e-commerce, including the cross-border one;
ensuring effective tax administration of specific types of activities and sectors;
automation of the transfer pricing risk identification processes;
accession to the OECD Initiative on automatic exchange of information on foreign financial accounts, introduction of the Country-by-Country Reporting with foreign competent authorities;
providing technical assistance in the area of information reception procedures, data storage, data and information exchange security;
preparation for the second round of the EOIR peer review in the Global Forum on Transparency and Exchange of Information for Tax Purposes.

06 Strengthen capacities in the legal approximation of customs laws and regulations with EU acquis and international best practices, and implementation of it, through support, inter alia, to:

implementation of NCTS, covering support on legal issues, setting up the administrative structure and implementation of NCTS compatible national transit application, based on NCTS national transit application currently implemented by EU Member States, development of functional requirements, technical specifications and quality assurance of procurement of software development services;
creation of Ukraine’s financial guarantees system aligned with the EU customs legislation;
harmonization of Ukraine’s Customs legislation with the UCC and related acts as well as with the Regulation setting-up the EU system of reliefs from customs duty, support in the implementation of newly adopted provisions;
harmonization of Ukraine’s Customs legislation with the UCC and its delegated and implementing acts (Regulations Nos 2015/2446 and 2015/2447) on the implementation of the concept of Authorized Economic Operator (AEO).

07 Strengthen capacities of the tax and customs administration to counter tax avoidance and to implement trade facilitation measures through support to:

harmonization of Ukraine’s Customs legislation 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 PEM Convention, determination of origin status of goods, application of EU Tariff measures, etc.;
implementation of Development Strategy of the Risk Management System in Customs;
strengthening customs valuations control capacities of the Ukrainian customs

08 Component 4: Horizontal functions and governance

09 Support HRM reform in PFM institutions in the context of the Public Administration Reform through i.a. development and implementation of modern HRM policies (including MoF HR Strategy and HR Web-page of the MoF Intranet), initial and continuous training system (incl. MoF Online Learning Portal), as well as design and implementation of internal security, integrity and anti-corruption policies;

10 Support institutional development in the context of the Public Administration Reform through i.a. functional reviews, business process reviews, adaptation and change management (including institutional and organisational reform of the State Fiscal Service);

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

12 Strengthen capacities in IT governance and in IT project management 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 automation of functions in PFM in line with the priorities of the government specified in the Strategic plan for PFM IT systems development, through procurement of IT equipment, IT solutions, and IT development services related but not limited to budget process, accounting, budget execution and expenditure controls, revenue mobilisation and trade facilitation, financial crime investigation, public procurement, public internal financial control and external audit, MoF Online Learning Portal and IT security;