Breaking of stereotypes: what do Ukrainians know about who and how is managing public money?

Jurgita Domeikiene, Team Leader of the EU Public Finance Management Support Programme for Ukraine (EU4PFM) on NV.UA commented on the results of a survey on the topic: “Why do Ukrainians pay taxes, and where is that money spent? What do Ukrainians think of those who collect and distribute taxes in the country? Do citizens trust government agencies working in the public finance management area, and if not – why?”.

EU4PFM, as a project of the European Union for the support of public finance management, which has been operational in Ukraine since 2019, decided to ask the citizens and representatives of Ukrainian businesses those exact questions. The main goal was to understand the public’s knowledge and the level of trust put in the activities of the country’s public finance management institutions. The additional objective was to get a baseline evaluation to better monitor how the situation develops after the transformations in state finance management, supported by the European Union.

The results confirmed that confidence in the government isn’t something that is taken for granted. It is built over the long course of interaction. And this means that the authorities must work to build this trust: to provide the services needed by society, deliver them through channels that are convenient for the public and business, and in a convenient and useful way for the community.

Effective public finance management and well-functioning public financial institutions are the pillars of a strong economy and democracy. I believe that trust in those institutions should be built as a puzzle of positive perceptions and actions that are understandable to citizens and businesses. This also applies to the Ministry of Finance of Ukraine, the State Customs Service, and the State Tax Service – our Partner institutions in the EU4PFM project. We asked Ukrainians and business representatives what can be done to improve the performance and communications of those institutions.

The survey was conducted on 1,200 respondents aged 18 and older, reflecting the society in which there are more elderly people than young people, the level of education, and so on. In addition, the same questions were addressed to 300 business representatives, selected according to activities, geography, and their business size.

I would like to leave detailed survey results for the management of relevant institutions – this could be used as ground information to improve their performance and communications. Yet, the survey suggested some insights, which, I believe, could be interesting for a wider audience as it breaks some prevailing stereotypes and shows potential opportunities for Ukraine.

The first thing I want to flag up is that assessment is always present. It is based on personal experience, information from the media, friends, and family talks. If a person does not have information, then the basis of his attitude is… rumors. Naturally, such an opinion is usually negative and unappealable.

Citizens judge the institutions, not because of their experiences but because they read something in the media or heard from acquaintances. Even though only 8% to 24% of respondents have dealt with some of them! This should encourage public institutions to more proactively communicate with the general public on their activities and decisions.

We have asked Ukrainians how they evaluate the performance of the Ministry of Finance of Ukraine, the State Customs Service of Ukraine, and the State Tax Service of Ukraine. Interestingly, together with evaluation, we have received quite general answers – survey participants pointed out the difficult situation in the country, low pensions or salaries, and high levels of corruption in general. Businesses, among other things, complained about poor communication and insufficient assistance during a pandemic, especially for small businesses. Such answers are not directly linked with the work of institutions but negatively influenced the assessment of work of the institutions concerned.

The most common answer to the question of why people pay taxes was unexpected: “it’s a legal requirement.” So, fear, fear of punishment for non-payment of taxes, still wins. However, this answer was more often heard from the older generation. In contrast to the elderly majority, respondents under the age of 35 said that they pay taxes because it is a fee for public services. And this could be seen as a positive perspective in the nearest future. But still, the general population lacks an understanding that this is a common good and that taxes are paid for people to receive public services.

When asked what public services you receive, respondents mentioned health care, roads, social guarantees, but no one mentioned education. In my country (I’m from Lithuania), it’s the opposite: the majority would have named education in the first place. Thus, more proactive communication on different initiatives like the “Open budget project” could better inform the general public about budget spending. And this communication should be in simple and understandable language!

What was the most interesting, Ukrainians pleasantly surprised us by breaking some stereotypes. Less than half of the respondents agreed with the statement that tax avoidance is tolerated behavior in Ukraine. This shows a very positive perspective! One in three in both target groups (general public and business) think that companies would justify cheating on taxes if they had such a possibility. Half of the respondents disagree with this opinion. In Ukraine, too, there is no confrontation on this issue between the population and business, as is the case in some countries. In Ukraine, the business has a more positive image in society, which could positively influence the country’s development.

Which information channels remain the most convenient for the public and businesses when interacting with public finance bodies? Interestingly, today, in the days of chatbots and telegram channels, the most popular form is direct contact with representatives of institutions. In second place – the phone, and only in third place – email. People want to hear people!

Among the elderly population, TV channels remain the most convenient source of information. For young people, those are official institutions’ websites. This has been confirmed by business as well.

And finally, what information do people most want to know about public finance management institutions? Information about how taxpayers’ funds are used in the country is the most interesting topic for the public. Also, people are interested in the identified violations and reports of government agencies.

To summarise, the main task here for all of us – for Ukrainian institutions, for international experts who are supporting reforms, is to make every effort not only to create a transparent system of public finances management. It’s also essential to tirelessly advocate that taxes and a fair distribution system can improve living conditions for every citizen.