Proposals for the State Tax Service orders on amendments to the Anti-Corruption Program

At the regular meeting of the State Tax Service of Ukraine, Andriy Prykhodko presented comprehensive proposals for amendments to orders No. 639 of 07.08.2023 and No. 265 of 09.04.2024, which update the Anti-Corruption Program of the State Tax Service for 2023–2025.

The purpose of the proposed initiatives is to significantly increase the transparency of the work of tax authorities, reduce corruption risks, and strengthen the trust of citizens and businesses, using best international practices.

Key vulnerabilities identified during the analysis

The analysis of the State Tax Service Risk Register revealed a number of systemic problems that need to be addressed:

1. Insufficient automation of processes: The Risk Register shows that functions such as desk, documentary and factual inspections (risks #4, #6, #7), suspension of registration of tax invoices (risk #8) and tax debt management (risks #13–15) have a high level of corruption risks due to the discretionary powers of officials. The lack of automated monitoring systems makes it difficult to promptly detect violations.
2. Insufficient control over conflict of interest: In functions related to judicial representation (risk #11), personnel selection (risk #17) and control of excisable goods (risks #24–28), the detection of conflict of interest depends on periodic inspections, which is not sufficiently effective. The lack of automated declaration analysis systems reduces the ability to detect private interest.
3. Limited transparency in procurement: Public procurement (risk #18) and expenditure planning (risk #20) are vulnerable to collusion with counterparties. Current controls, such as price monitoring, are not automated, which reduces transparency.
4. Insufficient protection for whistleblowers: The consideration of corruption reports (risk #21) depends on the subjective decisions of authorized persons. The lack of an anonymous platform for whistleblowers makes it difficult to protect them and record violations.
5. Low effectiveness of training: Training on anti-corruption legislation (risks #3, #4, #6, #7) is conducted regularly, but without evaluating its effectiveness. This can lead to unintentional violations due to insufficient awareness of employees.

Proposed measures

Andriy Prykhodko proposes a comprehensive modernization of the program, which includes:

Implementation of a CRM system

Create a module for automated distribution of taxpayers between managers, monitoring of reporting and risk analysis (similar to risks No. 4, No. 8, No. 9).

1. Integrate CRM with the Tax Block ICS for automatic tracking of reporting and tax payments.
2. Deadline: 2024–2025.
3. Responsible: Department of Information Technology, Department for Corruption Prevention.
4. Indicator: Reduction in the number of complaints about subjective decisions by 40% by the end of 2025.

Model of personal tax managers

Each taxpayer is assigned a personal tax manager (load - up to 50 taxpayers per manager). Manager's tasks:

1. Coordinate taxpayers: provide document templates, inform about training, answer basic questions.
2. Monitor reporting and budget fulfillment, identify violations and transfer them to the relevant departments according to the algorithm.
3. Managers' salaries are tied to KPIs: budget fulfillment level, timeliness of reporting, number of violations detected.
4. All communications (calls, correspondence) are recorded and transferred to the corruption prevention department for quality control.

Goal: Simplify taxpayers' access to the State Tax Service, increase trust, reduce discretionary powers, and ensure transparent control over activities.

Assigning taxpayers to managers

Develop regulations on tax managers, determine KPIs (for example, 95% timely reporting, 80% implementation of the budget fulfillment plan).

1. Introduce manager rotation every 2 years to avoid conflicts of interest (risk #17).
2. Deadline: 2024.
3. Responsible: Personnel Department, Department of Taxation of Legal Entities, Department of Taxation of Individuals.
4. Indicator: 100% of payers are assigned to managers by the end of 2024.

Whistleblower protection

Create an anonymous platform for reporting corruption, integrated with a CRM system, similar to the Whistleblower Office in the US (risk #21).

1. Provide legal protection for whistleblowers and educational campaigns.
2. Deadline: 2025.
3. Responsible: Department for the Prevention of Corruption.
4. Indicator: Increase in the number of anonymous reports by 30% by the end of 2024.

Strengthening training

Introduce mandatory online courses on anti-corruption legislation for managers with annual testing (similar to the practice in Poland).

1. Involve international experts for training, as in the UK (HMRC).
2. Deadline: 2025-2027.
3. Responsible: Department of Human Resources, Department for the Prevention of Corruption.
4. Indicator: 95% of managers have been trained and received high scores by the end of 2027.

International experience

• Poland:

Poland uses a “client manager” model for large taxpayers. Each manager coordinates reporting, advises and monitors compliance with tax obligations. The JPK_VAT system automatically analyzes tax invoices, reducing subjective influence. Communications are recorded and data is verified by the Central Anti-Corruption Bureau (CBA).

Lesson: Automation and assigning managers to taxpayers increases transparency and trust.

• USA (Internal Revenue Service, IRS):

The IRS uses a “taxpayer advocate” model to support taxpayers. Each advocate assists with reporting issues and coordinates audits. The DataMart system automatically identifies risks, and communications are monitored through a centralized platform. Employee salaries are partly based on KPIs, such as service quality and budget fulfillment.

Lesson: KPIs and automated communication monitoring reduce corruption risks.

• United Kingdom (HM Revenue and Customs, HMRC):

HMRC uses the Making Tax Digital platform to automate reporting and reduce contact between taxpayers and officials. Each taxpayer has a “personal advisor” who coordinates reporting and provides advice. Quality control is ensured through external audits and public consultations.

Lesson: Digital platforms and public engagement increase transparency.

Expected results

The proposed changes to the Anti-Corruption Program of the State Tax Service, in particular the implementation of a CRM system and a tax manager model, will allow:

1. Reduce discretionary powers through automation (risks #4, #6–8, #13–15).
2. Strengthen control over conflicts of interest through recording communications and analyzing declarations (risks #1, #11, #17).
3. Increase transparency of procurement and financial transactions (risks #18, #20).
4. Protect whistleblowers through an anonymous platform (risk #21).
5. Raise employee awareness through modern training methods.

These measures, adapted from the experience of Poland, the USA and the UK, will contribute to increasing trust in the State Tax Service, reducing corruption risks and effectively filling the budget. We call on the public to support these changes and participate in their implementation.