The tax authorities called it an exposure. In reality, it is the result of rules that the state itself created for business.
Recently, the State Tax Service of Ukraine reported that it had identified signs of a large-scale scheme for transferring funds abroad involving more than 2,000 risky companies. According to the tax authorities, the transactions amounted to over UAH 198 billion, after which the foreign currency proceeds did not return to Ukraine.
Rafael Horoyan, owner and Chairman of the Supervisory Board of the Prometey agricultural holding, believes that this situation cannot be explained solely by the actions of individual companies. In his view, it is also the result of rules that the state itself has created for business.
This is not just another high-profile statement by the State Tax Service. In fact, the tax authorities described the result of a system that, instead of encouraging businesses to return foreign currency, often punishes them for circumstances beyond their control: war, attacks on ports, logistics delays, falling prices on global markets, and late payments by foreign counterparties. Under such conditions, strict deadlines and draconian fines turn not into a tool for bringing currency back, but into a reason why businesses may lose any incentive to bring these funds into Ukraine.
Rafael Horoyan believes that in this story the state should be asking itself far more questions than it asks business.
“To be honest, I am struck by the very tone of this statement. The tax authorities present it as an achievement: as if they have uncovered a large-scale scheme. But if we look at it honestly, this scheme did not emerge in a vacuum. It grew out of a system of rules that the state itself created for business. When you are forced to return currency within a strict deadline, but war, logistics, the buyer, the market and the realities of international trade are not taken into account, sooner or later these rules begin to work against the state itself,” said Rafael Horoyan.
According to him, the problem is much deeper than simply the existence of “risky companies”. It lies in the very logic of state control over the return of foreign currency proceeds to Ukraine. In particular, it concerns draconian fines.
Today, Ukrainian businesses are required to return foreign currency proceeds for exported goods within a set deadline. On average, this is 90 days. If a company fails to do so in time, it faces a penalty that in some cases may effectively equal the amount of the proceeds themselves.
“In other words, a company may actually ship the goods, fulfil the contract, incur all expenses, but fail to receive payment on time due to circumstances beyond its control. And after that, the state comes not to help, but to punish. The question is simple: does such a policy encourage the return of currency to Ukraine? No. And again, no,” Horoyan stressed.
He points out that in many developed jurisdictions — including the EU, the United States, the United Kingdom, Switzerland, the UAE, Singapore, Japan and Canada — businesses are not forced to physically return foreign currency proceeds to the country within a strictly defined period. The key task of the state there is to ensure taxation of profits and transparency of operations, not to create a trap of deadlines and fines for business.
In Ukraine, according to Horoyan, especially during the war, businesses are forced to operate under rules that often fail to reflect reality.
“Let’s imagine a simple situation. A Ukrainian company sells wheat to an Egyptian buyer. While the vessel is being loaded and then reaches the port, the market price drops sharply. The buyer does not want to lock in a loss, puts the goods into storage, does not sell them and does not pay. We physically cannot return the foreign currency proceeds to Ukraine because we have not yet been paid. Not because we do not want to. But because the money simply does not exist yet,” explained the owner of Prometey.
According to him, in real agricultural exports, payment delays can last for months, and sometimes even years.
“We have had cases where we waited two years for payment. Eventually, the company may still receive the money. But by that time the tax authorities will have charged such a penalty that the entire revenue will simply be eaten up by the fine. What sense does it then make for business to return these funds? The state is effectively pushing businesses toward a situation where the money remains abroad,” Horoyan noted.
Another issue is war-related risks, which the Ukrainian tax system still has not learned to take into account properly. For example, a company loads a vessel in Chornomorsk, after which attacks on port infrastructure begin. The business tries to move the goods out as quickly as possible in order not to lose them physically. But as soon as the goods cross the border, the countdown for the return of foreign currency proceeds begins.
“Business is saving goods from war, while the state starts a stopwatch at that very moment. In 90 days, you must already return the currency. But war, logistics, falling prices, problems with the buyer, delays in ports — all of this seems to interest no one. The tax authorities look only at the formal deadline. This is not a partnership between the state and business. It is a repressive approach,” said Rafael Horoyan.
He is convinced that the current model does not encourage businesses to return currency to Ukraine. On the contrary, it creates a situation in which an entrepreneur who has not received money on time for objective reasons faces the threat of losing everything because of fines.
Horoyan emphasises that he understands why the state, in wartime, seeks the return of foreign currency proceeds. It is an instrument of currency and macroeconomic policy, necessary to support the hryvnia exchange rate and foreign reserves. However, the methods currently being used may produce the opposite result.
“I understand the state’s goal. The country needs currency. Especially during the war. But harsh fines, ultimatum-like deadlines and the approach of ‘either this way or no way at all’ will only increase the amount of unreturned proceeds. If today we are talking about almost UAH 200 billion, tomorrow this figure may be even higher. Not because all businesses want to move something out, but because the rules do not correspond to reality,” he said.
According to the owner of Prometey, the state should move from a punitive model to a model of incentives. For example, it could introduce incentives for companies that return foreign currency proceeds faster: preferences in currency exchange, tax incentives or other mechanisms that would make the return of funds beneficial rather than coercive.
“Business should not be spoken to in the language of threats. Business should be motivated. If a company returns currency within a month after export, give it a bonus, better terms, a preference. Create an economic reason to bring money back faster. Not a situation where a person understands that if they return the money late, the state will simply take it away,” Horoyan stressed.
He also believes that the rules must take into account war-related risks, the specifics of agricultural exports, force majeure circumstances, delays by foreign counterparties, and the real payment timelines in international trade.
Separately, Horoyan draws attention to the final part of the State Tax Service’s statement, which mentions the transfer of materials to the Office of the Prosecutor General and the preparation of analytical conclusions regarding 557 business entities.
In his opinion, this only confirms the main problem: the state often reacts when billions have already failed to return, instead of creating a system that prevents such situations and helps legitimate businesses operate.
“Businesses do not need showpiece reports after the money has already disappeared. Businesses need clear, flexible and realistic rules. Because today the tax authorities often do not facilitate the return of currency to Ukraine, but create a risk that this money will remain abroad,” Rafael Horoyan concluded.
Prometey is convinced that if the state truly wants foreign currency proceeds to return to Ukraine, it must not only look for those to blame after the fact, when the amount has already reached hundreds of billions of hryvnias. It must create conditions under which honest businesses can and will find it beneficial to operate transparently, fulfil contracts and return funds to the country without the risk of being destroyed by fines.
Because today, as the situation shows, the tax authorities do not so much support business activity as create obstacles, the consequence of which may be exactly what they claim to be fighting against: money remains abroad.
