A significant increase of the corruption environment could be approved at the legislative level.

On July 1, 2021, the odious bill 5600 passed the first reading, which upset and alarmed the business community in Ukraine: all associations and clubs expressed their concerns about the innovations, but despite this, the bill was adopted as a basis with 264 votes.
Experts and businesses define the new rules of tax lien as a real “noose around the neck” of Ukrainian business – the tax lien will arise even before the court decides who is right and who is wrong.
We are talking about a tax lien, the essence of which is set out in subparagraph 14.1.155 of the Tax Code of Ukraine: “If the taxpayer fails to fulfil the monetary obligation secured by the tax lien, the collection authority, in the manner prescribed by this Code, will foreclose on the property of such payer, which is the subject tax lien». If bill 5600 is passes, the tax office will be able to immediately restrict the owner’s use of funds in the bank or company assets for any reason, even if such a reason is not legally justified. Consequently, current problem of tax inspectors demanding bribes in order to not burden companies with unreasonable fines will increase significantly, as they will receive legal power from government itself which can be abused to unjustly force company into liquidation. Such a law can also become a weapon for raiders, who will be able to use their “connections” in the tax office to eliminate competition.
So the assets of the enterprise are held hostage by the tax authorities, and it is the tax authorities who will decide which assets they want to take as collateral. The tax office will be able to allow or forbid the sale of the property secured by the tax lien, and it is the tax office that gets the right to take assets as a matter of priority. The last point will hit hard on the cost of financing for a business. The price of lending will increase, because the tax service will get the priority rights to the property secured by the tax lien, and these are additional risks for which the business will pay. Court`s processes in Ukraine could take years, and with such a stifling business framework, many companies simply will not survive until the decision of the appellate court, even the positive one. The result of all mentioned above is a rise of favourable environment where development of corruption schemes and plots can take place. Indeed, it is precisely in inspector`s hands all the tools of influencing the business because the fate of the company depends on his decision, and it does not matter whether this decision is legitimate or not. Indeed, all tools for influencing the businesses are in inspector´s hands, as the fate of company depends on his decision, no matter legitimacy of it.
The official State Tax Service of Ukraine website published information that for the January-December 2020 (as of 01.01.2021) were considered in the courts of various instances in favor of taxpayers – 10.55 thousand cases for UAH 32.05 billion.
The astronomical amount of UAH 32.05 billion in 2020, following the bill 5600, would have been illegally seized for an indefinite period
due to the illegal actions of tax inspectors, instead of being invested in the country’s economy. The question of how much tax officials will want to earn on the desire of businessmen to avoid such financial losses, we will leave open.
The explanatory note to the bill states that the project was not carried out by Public anti-corruption expertise. Perhaps this has led to the introduction of such murderous business proposals.
“Thus, no one will benefit from the introduction of changes to collect tax liens: neither the state budget, because these funds are not withdrawn from the taxpayer, nor the country’s economy, because foreign, as well as national, investments will tend to zero, nor the tax system itself, because creating an opportunity for a corruption scheme will certainly lead to its development”- commented Alexander Vasilivsky, Chairman of the AAU.