CASE Ukraine starts Honest Price Initiative: How fair businesses transfer consumer taxes to public coffers
According to CASE Ukraine Executive Director Dmytro Boyarchuk, Honest Price is intended to remind consumers that the price of the things they buy includes indirect taxes, such as the value-added tax or VAT. This means that every time someone buys goods or services in Ukraine, they also provide revenues to national and local budgets.
“According to a 2020 survey by CASE Ukraine, only 20% of Ukrainians know what taxes they pay at the store when buying goods,” says Mr. Boyarchuk.
According to the Honest Price initiators, not all sellers transfer indirect taxes such as the VAT, import duty, and excise to public coffers, fully or in part. When these are not reflected in the price, the goods or services are cheaper.
“We plan to conduct the Honest Price Initiative only in cooperation with entrepreneurs and businesses that can prove their integrity,” explains Mr. Boyarchuk. “They will then get the Honest Price sticker because they act as honest tax agents, meaning they transfer the taxes they receive from their customers to the Treasury. And this money goes to pay our doctors, our army, teachers, and so on.”
For consumers, this means that, where there is a “Honest Price” sticker, they will know that the owner is honest with taxpayers and with the budget.
“We’d like to see consumer economic understanding match the desire of honest entrepreneurs to stand out,” says Dmytro Boyarchuk.
To join the Honest Price initiative, a company or sole entrepreneur needs to fill out a questionnaire, which will then be checked to establish their “integrity index.”
“So far, we’ve developed criteria for four industries: consumer electronics, alcohol, medications and fuel,” reports Andriy Savarets, an associate expert at CASE Ukraine. “And we’re in the process of developing criteria for other markets.”
According to Mr. Savarets, the integrity criteria are divided into three parts: the company, the sales process, and the product. Individual criteria are not self-sufficient. Only when the entire picture is available is it possible to say whether the seller meets the Honest Price criteria.
More information about the integrity criteria, conditions for participating, and the algorithm for determining successful applicants can be found on the Honest Price website.
The CASE Ukraine Center for Social and Economic Research is the author, organizer and rights holder of the Honest Price initiative, which is being implemented within the framework of the Price of the State program.