Pendzin: closing customs schemes worth UAH 170 billion will bring more benefits to the budget than a parcel tax

Ukraine’s budget loses up to UAH 170 billion annually due to schemes and corruption at customs. And the elimination of these schemes would be a much bigger source of revenue for the state than the introduction of a parcel tax. Economic expert Oleh Pendzin points this out in his blog, UNN reports.

“Customs losses are estimated at UAH 120-170 billion. Perhaps closing these loopholes will bring more to the budget than the exploitation of penny taxes on penny goods or parcels? By the way, the authors of the idea have not yet clearly calculated the budgetary effect, especially taking into account the costs of modernizing customs, expanding its staff and strengthening anti-corruption control,” the economist writes.

Penzin believes that the “parcel tax” will only become a new tool for extortion from the population living below the poverty line and looking for cheaper alternatives. Instead, the need to inspect millions of postal items will open up new opportunities for extortion.

“A separate question: maybe we should protect people, not retailers, who charge three times higher prices for items from Aliexpress or Tema? If these goods are taxed now, Ukrainians will lose one of the few opportunities to save money in times of economic hardship. And so far, we see no signs of an increase in the average Ukrainian’s income, not those Ukrainians who help car dealers set records for car sales in times of war,” Pendzin emphasized.

The economist does not see the “parcel tax” as a desire to protect domestic producers or any benefit to the domestic market. Initially, the expert emphasizes, it would be worth creating conditions that would allow it to develop and provide Ukrainians with the necessary goods.

“Other mechanisms can be developed to support business, at least to ‘awaken’ bank lending with reasonable interest rates. And business will not “take off” the day after the adoption of the law restricting access to the Ukrainian market for cheaper products – it will take months and years to offer an alternative,” the expert points out.

Pendzin emphasizes that it is economic hardship that dictates that millions of Ukrainians not only want, but need to look for alternatives to imports.

At the same time, the biggest beneficiaries of the “parcel tax” will not be the budget, but corrupt officials and their “clients”.

“We run the risk of a new wave of illegal schemes and ‘backdoor deals’. There are already dozens of ways to circumvent customs control, and an increase in the tax burden will only encourage shadow flows. Large consignments of goods registered as “postal items” will end up in the hands of those who know how to negotiate – these are the billions in the shadows. And ordinary citizens will remain hostage to the new system and poverty, the last way out of which was closed by statesmen under beautiful patriotic slogans,” warned Oleh Pendzin.

The economist noted that before introducing the “parcel tax,” customs should be properly equipped, corruption should be overcome, and the necessary staff should be formed, which requires time and investment.

“It may turn out that the budget and producers do not need these ‘postal taxes’: the budget will use the full potential of shadow whitening, Ukrainians will get out of poverty and stop buying penny junk around the world, and Ukrainian business will grow and fill the market with a decent product offer in terms of price and quality,” the expert predicts the possible development of the situation.