Performance indicators will be set for customs and tax authorities

Danylo Hetmantsev, Chairman of the Verkhovna Rada's Tax Committee, has announced that he has submitted for registration draft laws on establishing KPIs for customs and tax authorities.

The draft laws propose to introduce an assessment of the efficiency and effectiveness of tax and customs authorities in order to increase the transparency and accountability of tax and customs authorities, optimize management decision-making processes, and eliminate shortcomings in their activities.

The assessment will be based on KPIs to be determined by the Ministry of Finance and published on the official websites of the State Tax Service and the State Customs Service. Based on the results of the assessment, the STS and the State Customs Service will prepare reports to be published on the websites of these bodies.

The draft law on establishing KPIs for the tax authorities proposes:

1) defining the concept of "tax gap" and introducing an annual calculation and publication of this indicator;

2) defining the concept of "key performance indicator of tax authorities" (KPI) and establishing requirements for KPIs;

3) introduce the IMF-recommended classification of KPIs for the STS into strategic (for more than one year) and operational (annual);

4) establishing the relationship between the individual performance appraisal of an official and the performance appraisal of the STS;

5) to regulate the procedure for the quarterly disclosure of information on the implementation of KPIs for the STS;

6) the first reporting period for assessing the efficiency and effectiveness of the tax authorities should be 2025, and in order to take into account the best international practices (TADAT) and recommendations of international organizations (IMF, OECD), the draft law proposes a list of KPIs recommended for the STS.

The draft law on the establishment of KPIs for customs proposes:

1) to define the types of evaluation - internal (conducted by the State Customs Service on the basis of KPIs developed by the Ministry of Finance) and external (conducted by independent experts appointed by the CMU on the basis of proposals from international and foreign organizations);

2) to determine that the following areas of customs activities are subject to internal assessment:

• creation of favorable conditions for trade facilitation and competition development
• administration of customs payments;
• protection of society, public health and environmental safety, and combating the illegal movement of drugs and weapons;
• organizational development of the customs authorities;

3) The Ministry of Finance is recommended to take into account the WCO Performance Measurement Mechanism developed by the World Customs Organization when determining KPIs for customs.