Corruption in Tax Service: UAH 15B conversion scheme uncovered

According to NABU, the investigation has identified the former head of the State Tax Service and the deputy head of the main department of the State Tax Service in the Poltava region. Between 2020 and 2023, the group created a network of over 200 shell companies to facilitate tax minimization schemes.

The fraudulent mechanism included issuing false tax invoices for fictitious transactions with actual enterprises; registering these invoices in the Unified Register of Tax Invoices; and using the fake invoices to reduce actual companies’ tax liabilities.

Law enforcers found that the scheme generated fake invoices for goods and services totaling UAH 15 billion, with fraudulent VAT claims exceeding UAH 2.3 billion.  The acting head of the Tax Service at the time enabled the scheme’s operations, while the Poltava region’s official ensured favorable decisions for the involved companies through her role on the invoice registration commission.

As a result, actual enterprises avoided paying UAH 147 million to the state budget.

Law enforcers have formally charged 11 individuals in connection with the case.