Against the background of the war, Ukrainian farmers are resorting to “optimization” of grain taxation, which is why about 40% of the grain harvest avoids it altogether. Over the past two years, through such frauds, Ukraine has lost about $3B in revenue, notes The Economist.
According to Deputy Minister of Economy Taras Kachka, farmers are motivated to “optimize” taxes by the disruption of logistics chains due to Russian shelling, the reduction in the domestic market due to the departure of about 6.5 million Ukrainians (15% of the pre-war population) and the mobilization of workers to the military.
According to estimates, about 40% of the grain harvest currently avoids taxation. In the last two years, more than $3B was taken out of the country through untaxed grain sales, and according to other estimates, this figure may be even higher. Over the previous eight years, the total was likely $4B.
To combat shadow transactions, the Economic Security Bureau analyzes data to identify suspicious shipments and has improved information sharing between investigators and customs.