On the way to the EU accession: Ukrainian institutions got acquainted with Lithuanian experience in reforming the public finance management system

On 24-26 October 2022, Vilnius hosted the first offline meeting of the EU4PFM partners since the war started. The purpose of the meeting was to discuss the progress of the EU4PFM Project and to exchange experiences with European colleagues on the way to Ukraine’s accession to the EU.

The second day of the visit began with a meeting of the Ukrainian delegation with the top management of the Ministry of Finance of Lithuania. Rūta Bilkštytė, Vice-Minister of the Ministry of Finance of the Republic of Lithuania presented a long-term strategy for increasing sustainable public finance outlining main tax policy design trends. Vice-Minister highlighted the importance of digitalization of data to ensure effective data exchange, the launch of scanners at the customs post to effectively fight smuggling, and a campaign for young people on how the taxation system works. Denys Uliutin, First Deputy Minister of Finance, at the same time reassured Ukraine’s readiness to implement new initiatives despite the challenging times for Ukraine.

On the same day, representatives of the Ministry of Finance and the State Tax Service of Ukraine met with the State Tax Inspectorate of Lithuania. Head of the State Tax Inspectorate under the Ministry of Finance of Lithuania Edita Janušienė shared experience in tax administration and presented the «Poliaris» Strategy to the participants, aimed at reducing operational losses and optimizing processes and procedures. Thanks to this programme Lithuanian State Tax Inspectorate has significantly reduced the administrative burden on business. Tax officials also discussed the implementation of CRS/CbC standards for automatic information exchange. Colleagues from Lithuania spoke about EU instruments on effective administrative cooperation and smooth functioning of the internal market, in particular, VAT and excise duties, relevant IT solutions for information exchange with the EU countries deployed by the Lithuanian STI in practice.

At the same time, Mr. Darius Žvironas, Director General of the Customs Department under the Ministry of Finance of the Republic of Lithuania, shared his experience of the implementation of the Help Desk (ITSM) and the process of IT consolidation. Ukrainian delegation represented by the top management of the State Customs Service visited Customs Checkpoint in Medininkai, where Laimis Žlabys, Head of the Customs Control Organization Division, presented services at the cargo parking lots near the border crossing points as well as a performed demonstration of the IT system for data exchange between neighboring countries.

During the meeting with the Ministry of Finance of the Republic of Lithuania and CPMA, the Ukrainian delegation discussed practical steps for the development of a new IT system for budget planning for the Ministry of Finance of Ukraine, in particular technical specification and procurement process organization.

On the third day, the top management of the Ukrainian PFM partner institutions paid a courtesy visit to the Government of Lithuania where they met with Galina Vaščenkaitė and Darius Žeruolis, Advisors to the Prime Minister of Lithuania. This was followed by active discussions on the steps that have to be further taken by Ukraine in the PFM domain. Ukrainian delegation stressed that the main reference points placed by IMF and EC for Ukraine on the way to the Association agreement have been accomplished both on the legislative and technical levels.

This day there was also a Meeting with the Lithuanian Customs Department where discussions on processes and communication models between Customs and postal operators including the logging of a declaration by a postal operator, and recipient of postal consignment took place. The SCS also got acquainted with the new IT systems for traders and customs clearance of the postal consignment. Lithuanian Customs department shared its experience with simplifications for transit and other simplifications. The SCS delegation took part in the demonstration of the application, selection for checking according to the results of risk management, IPR control at the Customs Post Office, and in the demonstration of the transit and other simplifications at the premises of the trade.

In parallel, representatives of the Ministry of Finance and the State Tax Service of Ukraine met with colleagues from the State Tax Inspectorate of Lithuania to continue the exchange of knowledge and experience in implementing the best tax practices according to EU standards. They talked about tax audit and electronic services for taxpayers, in particular implementation of the standard audit file for taxes (SAF-T).

During the meeting with the representatives from the Ministry of Economy and Innovations and Information Society Development Committee of Lithuania, the delegation from the Ministry of Finance of Ukraine discussed with its colleagues ongoing process of consolidation of infrastructure and information technologies in Lithuania, as well as open data platform which publishes relevant data and makes it accessible for the citizens.

Ukraine is confidently moving towards joining the EU, so the exchange of experience with European colleagues for the successful implementation of EU legislation is of the greatest importance now. The participants received practical advice from European partners and outlined for themselves the “homework” that should be completed in a short time for joining the EU.