AUTHORITIES AND THE UKRAINIAN OIL & GAS ASSOCIATION DISCUSS MEASURES TO COMBAT THE ILLIGAL FUEL MARKET

On November 9, 2024, the Ukrainian Oil & Gas Association participated in the conference “De-shadowing Retail Trade: New Challenges” in Kyiv. The event served as a platform to address critical issues surrounding the de-shadowing of Ukraine’s economy. It brought together government officials, business leaders, and experts to analyze research findings on the scale of the shadow economy, the economic impact of preferential customs policies, and new initiatives introduced by the Verkhovna Rada and the Cabinet of Ministers of Ukraine.

Key government participants included:

• Danylo Hetmantsev, Chair of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy;
• Yevhen Sokur, Acting Deputy Head of the State Tax Service;
• Ivan Pysarchuk, Deputy Head of the Strategic Investigations Department of the National Police of Ukraine;
• Representatives of the State Customs Service.

The President of the Ukrainian Oil & Gas Association, Yaroslav Starovoytenko, highlighted the pressing problem of illegal fuel stations and tax evasion schemes in the fuel sector. He emphasized that these practices result in significant losses to the state budget and create unfair competition for legitimate businesses. In his address, Starovoitenko proposed several solutions, including:

• Strengthening control over the illegal fuel market;
• Preventing receipt fraud through legislative amendments to fiscal cash register regulations;
• Enhancing collaboration between government agencies, legitimate businesses, and civil society to eliminate illegal fuel retail points.

Participants also discussed new strategies to reduce customs violations and curb the shadow economy in high-risk sectors. A particular focus was placed on the stark disparities in wage levels within different sectors. For example, in the fuel industry, some companies pay market-level salaries exceeding UAH 30,000, while others report salaries of UAH 4,000–9,000, supplementing the rest in cash to evade taxes.

Experts from analytical centers underscored the importance of intensified measures to combat shadow retail trade by:

• Restructuring the operations of the Bureau of Economic Security (BEB), the State Tax Service (DPS), and the State Customs Service (DMS) with the involvement of international experts;
• Establishing clear performance criteria for government agencies;
• Providing detailed analytical data;
• Strengthening accountability for violations of customs and tax regulations;
• Improving interagency coordination.

Danylo Hetmantsev remarked that de-shadowing is critical not only for bolstering the state budget but also for fostering fair business practices. “Legalization is a collective effort that requires the consolidated efforts of all stakeholders. While the road to full transparency is long, each step forward refines our strategy and brings tangible results,” Hetmantsev concluded.

The “De-shadowing Retail Trade: New Challenges” conference marked a significant step in fostering dialogue between government and business, aimed at building a transparent and equitable economy in Ukraine. The active participation of the Ukrainian Oil & Gas Association highlighted its commitment to combating shadow practices and supporting economic stability.