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3-Year-Long Fiscal Service Reform

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As CASE Ukraine senior economist Volodymyr Dubrovsky says, there is still no concept of a reform that could be theoretically discussed.

The delays and disagreement between the Ministry and the prime minister as to whom the Fiscal Service of Ukraine (SFS) will be subordinated – to the Ministry of Finance or directly to the Cabinet of Ministers – he explains very simply. The design of the forthcoming is an object of a tense struggle, since those who control SFS also control corrupt ‘flows’ and tools for pressure on enterprises and politicians linked to them.

However, the Ministry acknowledges that only a part of the forthcoming reforms is announced, namely, the project management infrastructure.

Creating a supervisory board is a positive step. According to Dubrovsky, involving of such a representative international body is much better than an attempt to do everything solely through the capacity of Ukrainian officials and experts, as this may allow the process to be more transparent.

The economist, however, adds that it is necessary for the success for foreign specialists to understand that they deal not with a civilized western fiscal service, but with the body established in the time of President Kuchma to do ‘state racket’. In addition, this system has a very strong institutional memory. ‘This structure can be reformed only by a full reboot,’ Dubrovsky says.

 ‘The reform must have its own locomotive, which will lift it up as a flag to make a political career, and this is half the case,’ the expert says. He admits that the State Fiscal Service resists to changes permanently.

July 3, 2017