“A Shadow” Worth a Trillion Hryvnias: Getmantsev Alleges Large-Scale Tax Evasion Through Sole Proprietorships and Smuggling
9 April 12:29
Every year, Ukraine loses over one trillion hryvnias in tax revenue due to shadow schemes that span the entire system—from smuggling to shell companies. This is not a matter of isolated incidents, but a widespread phenomenon that has fueled corruption for years.
This was stated in an interview with the YouTube channel "Komersant Ukrainian" by Danylo Getmantsev, a member of the Ukrainian Parliament and chairman of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy.
According to Getmantsev, nearly one trillion hryvnias are currently in the “shadow economy,” and a significant portion of these losses stems from the widespread use of schemes involving fictitious sole proprietorships, unofficial salaries, and sales without fiscal receipts—even in large retail chains.
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“This isn’t some kind of hidden business. You walk into a shopping center and buy something—and often don’t receive a receipt. Or you’re given one from an individual entrepreneur who has no connection to the actual business. This is a widespread phenomenon,” the deputy explained.
He also highlighted the significant gap between official and actual salaries in the business sector, which also leads to significant tax losses.
“We see that companies are looking for employees at salaries several times higher than those they officially report and pay taxes on. The difference is three to five times,” he noted.
At the same time, the deputy identified smuggling as a key element of the shadow economy, which sets in motion the entire chain of illegal goods circulation in Ukraine.
“Goods are smuggled in, then sold through networks of fictitious sole proprietorships without accounting or taxes. This isn’t just business—it’s organized criminal activity,” Getmantsev emphasized.
According to him, the problem is compounded by the fact that various government agencies effectively ignore the existence of these schemes.
“Customs officials, tax authorities, and law enforcement turn a blind eye to this. And they do so for a reason. The shadow economy and corruption are one and the same; they feed off each other,” he stated.
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Getmantsev stressed that these phenomena can only be overcome through systemic changes and political will.
“This is a system that has existed for decades. And it can only be broken through systemic countermeasures—not piecemeal solutions, but comprehensive actions at the state level,” he concluded.
