The state of tax administration in Ukraine: report on the study results (2024)

15.12.2025 Download pdf (2 MB) In 2024, CASE Ukraine conducted a survey to examine the state of tax administration in Ukraine. The survey is based on the Global Survey on Tax Administration carried out by the World Bank in April–May 2024. The main differences from the World Bank survey lie in the methodology and in the specific focus on gaining a deeper understanding of the characteristics of the general taxation system compared with other tax regimes.

The results show that the general tax administration system is significantly more burdensome than the simplified taxation regime and that entrepreneurs face higher risks when transitioning to the general taxation system. The highest tax administration costs are borne by entrepreneurs operating under the general taxation system with VAT.

According to the survey entrepreneurs operating under the general tax system and paying VAT incur significantly higher administrative costs compared to other regimes, including time spent by employees on reporting and participating in audits. In particular, the average time spent on maintaining tax and accounting records under the general system with VAT is 478.2 person-days per year. This is over four times higher than the 114.5 person-days required for accounting under the simplified system with VAT. However, the latter figure does not account for self-employed individuals under the simplified system.

Doing business as an individual entrepreneur is much safer in terms of sanctions pressure (application of penalties, fines, additional charges, etc.). Thus, only 16.0% of individual entrepreneurs surveyed reported that sanctions had been applied to them, which is half the rate among entrepreneurs operating as legal entities (34.1%).

The main reason for bribery among entrepreneurs under the general tax system is to prevent unjustified obstacles or remove existing obstacles to business activities. On the other hand, those under the simplified tax system cite insufficient knowledge of tax accounting, completing and submitting reports, etc., as the main reason for bribery.

Entrepreneurs are divided in their opinions on the activities of customs and tax authorities. Thus, 47.1% of respondents said that tax and customs officials perform their duties conscientiously or mostly conscientiously. Meanwhile, 41.8% of respondents said that officials often fail to perform their duties properly or frequently abuse their power. Entrepreneurs subject to the simplified tax system rate the work of customs and tax officials more positively than those under the general system.

Corruption poses a bigger problem for VAT-paying entrepreneurs than for non-payers. Thus, VAT payers under the general system claim that corrupt practices “were a very strong obstacle” in 11.0% of cases, while non-payers answer this question affirmatively about half as often (4.7% and 4.8% for the general and simplified tax systems, respectively).

Entrepreneurs believe that the State Tax Service tends to facilitate tax evasion schemes (27.5%) rather than effectively prevent them (22%).