The Russian-Ukrainian war and threats from the air, the dry summer, and to all of this, the excessive pressure of the tax authorities on the agrarian business. This series of trials faced by the Ukrainian agrarian sector reminds us too much of the new horsemen of the Apocalypse, which may bury one of the most important industries for Ukraine. We talk to Rafael Goroyan, owner of PROMETEY Group of Companies, about how agribusiness survives today, about conflicts with the tax authorities and why businessmen today are forced to protect their business.The third year of the war turned out to be predictably difficult for companies related to the agricultural sector. And now there is already information in the network that PROMETEY - one of the largest agricultural holdings in Ukraine - is in a difficult financial situation and has to close part of its business. How are things now and what do you end the year with?
This year has been very bad for us. The banking system has turned away from us and agribusiness is not credited, drought has crippled us - we have not seen rain for half a year. But the most important factor is the tax system, which is perverting business in the country. For more than a year we have not been let off by systemic audits.
There is also a big problem with VAT refunds. We are exporters, traders, we buy grain with VAT for “live money”, we pay for this tax also with “live money”, and when we apply for reimbursement - at this stage the show starts. Our invoices are either blocked, or for some unknown reasons a part of VAT is removed and only the balance is reimbursed.
The tax authorities represented by the head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Danil Getmantsev want to make the amount of VAT even higher. That is, in this way it will be possible to take VAT from businesses once again, use it for years, and find reasons not to reimburse it. This looks like an interest-free loan for the state.
At the same time, in one of his YouTube podcasts, Danilo Hetmantsev spoke about the detenization of Ukrainian business. Allegedly, there are now up to 500 billion hryvnias of taxes in the shadow, which should be transferred to the state budget. What is meant by the detenization of the company?
Detanization of business is a very important state initiative. It is necessary to bring illegal business out of the shadows, because the state needs these taxes in times of war.
But corruption in the country can affect the process of detenization very much. As long as corruption thrives in the country, any, for example, higher official can call and say - “don't touch this company, it's mine”. It is necessary to start with corruption, not to oppress business and increase corruption under the pretext of detenization. This is, firstly, and secondly, because of the limitless increase in taxes, all business, on the contrary, is now massively going into the shadows. And what kind of detenization can we talk about, when a businessman, working at a loss, has to pay even more to the treasury! Believe me, this can achieve the opposite - the shadowing of business.
How, in your opinion, such actions of the tax authorities affect business processes?
The actions of the tax authorities are now destroying business. Over the last couple of years, many businessmen have emigrated to other countries, and even more have simply stopped their activities. Nearly 1,300 agricultural companies have closed since 2022. And in general, the agricultural industry is leading in terms of the number of liquidated companies.
For example, today the state has taken away UAH 500 million of VAT from the PROMETEY group of companies. And we are just a small part of the business. You understand what happens to big businesses, don't you?
I am one of the market participants. And in some part - its founder. In order to pay a salary of 15-20 million hryvnias every month, I need to earn this money somewhere. I have not been able to earn money for salaries, interest, loans and everything else for more than a year so far.
PROMETEY Group of Companies has been operating at a loss for a year and a half, almost all of our VAT goes through the court. This paralyzes the work of the company.
In our country there is no responsibility of a tax inspector and there is no practice of punishment for a biased fine.
Now the tax inspectorate will be responsible for all the courts that we win: the inspector who imposes these fines on us and the chief who signs the acts. This will be a precedent that has not happened. But we will reach the end.
Business wants dialog, but there is no understanding on the part of the authorities.
I appeal to Danil Alexandrovich Getmantsev. I ask you to meet with me and discuss all current issues.
You say that you want to see business as partners. I have the answers to all the claims that the tax authorities are making against us today. Please, let's see each other and talk about this topic.
What in practice does the status of risky, which the tax inspectorate has labeled some companies of the PROMETEY Group, mean? How does this practice threaten the business?
The tax inspectorate now has the right to designate a company as risky. That is, the tax inspector and his boss, who signs this document, can destroy any business without trial and investigation - without a prosecutor's office and without the right to a defense.
It is impossible to work with a company with the status of “risky”. Because all financial documents will be blocked. And, imagine, at the moment, there are 32 thousand VAT payers in this status - in the status of risky. This is more than 20 percent of the country's businessmen. Now the situation is critical and is getting worse every month.
And if earlier we had the right to picket, to sue - now these rights are gone, they are limited during the war.
In the world practice there is no such thing that the tax authorities can destroy the business of a taxpayer with one decision. In civilized countries, if all the data is correct, as required by law, there can be no blocking. The tax inspector, if he has questions about the activities of a company, simply sends a letter to the company with a request to explain these or those actions. And while the company responds to the letter, proving that all the rules and regulations are observed, the business continues its work, financial payments are made.
With us, at first we are blocked, all operations are stopped, and then we go and prove that we were right. We win the courts, but it takes a lot of time and resources. It literally destroys the company.
Our tax authorities do not like European practice - we can work in a different way. We propose to limit the time for which the tax office can throw the company into the status of risky. So that not the company should not have to prove in court its innocence, and the tax office within, for example, a few weeks, had to provide all the necessary evidence that confirms that the company should actually be in the list of risky.
What measures should be taken by the tax authorities to preserve the country's agrarian enterprises in a difficult wartime situation?
At the beginning of the war, the tax burden was lifted from agricultural producers and exporters, and they started giving loans to agrarians - now they say that it was a mistake. Why doesn't anyone want to think that because these benefits worked, people and businesses were saved? Because business was leaving the country en masse every day.
So they accuse us of violating currency control. But can at least one tax officer advise how to work as an exporter?
We have 30-40% of money stuck in the accounts of correspondents of our banks. Let's say we transfer money to Ukraine from Dubai, in 40-50% of cases this payment is stopped and they ask questions. Because we are from Ukraine - from a warring country.
While we are answering these humiliating questions, $2-3 million can be stuck on correspondent accounts. We brought this money into Ukraine to pay taxes, bank loans, and salaries.
Now Ukraine lives at the expense of donors, but it will not be like this all the time. A German citizen will not just subsidize a foreign country. Therefore, businessmen should be taken care of - they are the only source of income for the state. But instead of helping the farmers, they are morally destroyed by inspections.
Nevertheless, what forecast for PROMETEY Group of Companies can you give for the next year?
We are an agro-producer, a large grain exporter with a land bank of 20 thousand hectors of land, and a large logistics company. Before the full-scale invasion, we had a grain storage capacity of 2 million tons and were one of the three largest players in Ukraine's agribusiness sector.
Exporting grain and searching for markets is a different business with big risks. And our business largely depends on the work of the tax authorities and the weather. I am not talking about the military risk. Now for two weeks mass bombing of Odessa ports has been going on for two weeks now, they hit the ships that are being loaded in the ports.
But despite this, the forecast is generally positive. We are ready to accept all military and weather risks, because we have been living and working in such conditions for three years. But I will not allow lawlessness to my business under the flag of detenization.
Therefore, the issue of justice must be solved with the state. At the beginning of the full-scale invasion, when the state supported agribusiness, people felt needed. Thanks to what they live and create here, we will win the war.
I have been creating this business with my own hands for 30 years, and I will not give it up for destruction. I will speak openly about it. I still have this tool to protect it.
