According to recent surveys by BRDO, NACP, Advanter Group, and NDI, the tax (DPS) and customs (DMS) services rank highest among Ukraine’s most corrupt state bodies, creating problems for economic recovery and development. Bill No. 6490-d was adopted in 2024 and became Law of Ukraine No. 3977-IX, which came into force on October 31, 2024, providing for the creation of a competition commission by the Cabinet of Ministers of Ukraine to select the head of the State Customs Service by December 31, 2024. However, as of May 22, 2025, the commission has not yet been formed.
This violates the provisions of Law No. 3977-IX, threatens to perpetuate the current poor performance of the State Customs Service, and creates risks of Ukraine’s failure to fulfill its obligations to international partners. The Memorandum with the IMF provides the following: “Appoint the head of the Customs Service by the end of June 2025,” so according to existing competition procedures, the risk of non-compliance with the relevant clause of the Memorandum is significant.
In addition, given the need to find additional funding for the country’s defense this year and next, the issue of de-shadowing and minimizing” gray schemes” is highly relevant. Customs schemes (distorted declarations, interrupted transit, abuse of privileges, etc.) rank first among all shadow economy schemes, with estimated losses to the state budget of UAH 120-167 billion per year.
In addition to rebooting Customs, it is essential to establish high-quality KPIs for the State Tax Service and the State Customs Service, aimed not at fulfilling plans but at minimizing the tax gap, simplifying procedures, automating processes, reducing unjustified pressure on business, etc. The relevant draft laws have been registered in the Verkhovna Rada (Nos. 12359, 12360), and they must be adopted as soon as possible, with revisions before the second reading.
Analytical centers call on the Cabinet of Ministers, CMU Chairman Denys Shmyhal, Finance Minister Serhiy Marchenko, and Minister of Economy Yulia Svyrydenko to form a commission to select the head of Customs in May and facilitate the prompt conduct of the competition, ensuring the reboot of the State Customs Service in 2025.
Signatories:
Center for Social and Economic Research – CASE Ukraine
Growford Institute
Center for Economic Strategy
Institute for Social and Economic Transformation
Institute for Economic Leadership
Advanter Group Analytical Center
Office of the Chief Economist of the Coalition of Business Communities for the Modernization of Ukraine
Institute of Finance and Law Association of Tax Consultants
Network for the Protection of National Interests “ANTS”
Analytical Center “Technologies of Progress”
Institute for Tax Reform