De-shadowing of the jewelry market: The State Tax Service suspects a third of companies of concealing their turnover
5 March 20:14
One-third of entrepreneurs in the jewelry retail market report revenues that do not even cover basic business expenses. This was announced on Facebook by Lesya Karnaukh, acting head of the Tax Service, according to "Komersant Ukrainian".
“Despite some positive developments, the Tax Service’s analysis showed that some businesses are reporting very low turnover. Last year, a third of entrepreneurs reported revenues of up to UAH 100,000 per month. But in practice, this does not even cover the basic costs of the business – labor costs, rent, purchase of goods, and taxes. Therefore, there is clearly an understatement of sales volumes and incomplete transactions through cash registers/payment terminals,” said the acting head of the Tax Service.
The Tax Service explains that, in general, there are currently more than 2,100 businesses operating in the jewelry retail market, 95% of which are sole proprietorships under a simplified taxation system. The official salary of employees in the industry is 8,000-9,000 UAH, i.e., the minimum wage, while the real salary, according to the analysis of the State Tax Service, is 2-3 times higher.
The Tax Service also records schemes of “business fragmentation” in the industry. For example, during an inspection of one of the jewelry brands, it was established that it used 18 sole proprietors in its work.
“There are problems. Representatives of the industry acknowledge this. Constant systematic dialogue will help to solve them. We are not going to turn a blind eye to violations, let alone tolerate them,” added Lesya Karnaukh.
It is reported that last year, the State Tax Service conducted 254 inspections in the jewelry trade sector and issued fines totaling UAH 91 million. In addition, tax authorities detected 10 cases of undeclared labor.
