Customs reform may be implemented as early as this year. Prime Minister Denys Shmyhal said this in an interview with Forbes.
According to the Head of the Cabinet of Ministers, staff changes will not be effective without structural reform. "The government has signed an economic visa-free regime with the EU countries – all duties and barriers to trade have been removed. A transport visa-free regime has been signed as well. That means that the situation that was in 2021, when businesses complained about restrictions on obtaining permits to travel to Europe, no longer exists," the Prime Minister said. He added that negotiations were underway to extend the economic visa-free regime until the end or middle of 2024.
In addition, Ukraine has joined the European network of common transit NCTS. "The car is loaded in Berlin, passes through customs without stopping, and is cleared on the spot in Kyiv. This is a transparent system that makes corruption impossible," explained Mr. Shmyhal. Over the 4 months of the network's operation, 1175 such customs declarations have been processed. But their number should have been in the thousands. According to the Prime Minister, this shows that not all businesses are ready for transparency.
In general, the customs reboot involves six steps. The first one is the introduction of the joint checkpoints and a common database with EU countries, including Poland. "When the databases of Poland and Ukraine have the same information, everything will be equalised. Corruption in terms of smuggling will be reduced by 98%," the Prime Minister believes.
The second step is the digitalisation of all processes and the introduction of an electronic queue. The third step is to rotate customs officers every three months. "If teams from Cherkasy and Poltava go to the western border for three months, it will be difficult to build corruption schemes," the Prime Minister explains. The fourth step involves increasing the number of checkpoints. This will reduce queues at the border as well as corruption together with them. Mr. Shmyhal emphasised that work in this direction was already underway. Thus, for the first time in 24 years, new checkpoints with Romania were opened.
The fifth step is a risk-oriented approach. "If the trucks of a large international food company from the S&P500 list are travelling, customs officers clearly understand that they are carrying, for instance, food, not something prohibited. Such trucks must pass through customs through the 'green corridor'. And a 'white bus' with rusted sills, asymmetrical wheels, overloaded on one side, will be placed in the 'red corridor'," the Prime Minister clarified.
The sixth step involves the installation of serviceable scanners at all customs checkpoints. Ukraine has already agreed with the Poles to purchase 13 such scanners.
"We have already agreed with the President of the European Commission to open gradual access to joint databases. At present, for example, the value of goods is not disclosed in transit declarations, which is a very important indicator because it gives an understanding of tax deductions," the Prime Minister said.
As for the tax reform, Denys Shmyhal said that no significant tax changes are expected until the end of the active phase of the war. At the same time, negotiations are underway with the IMF to work together on the reform after the war.