Ternopil tax authority: turning a blind eye to the shadow tobacco business

Ukraine's tobacco market, long divided into legal and illegal segments, is facing blatant inaction by local tax authorities. This is particularly acute in Ternopil Oblast, where schemes for the production and distribution of counterfeit cigarettes are thriving almost openly.

The problem in numbers

The recent incident involving the seizure of a smuggled batch of cigarettes at Odesa port merely lifted the veil on the scale of the problem. The batch, valued at 165.6 million hryvnia, was produced at the facilities of Marshall Finest Tobacco Ukraine LLC, located in Ternopil Oblast. However, this is only the tip of the iceberg, as significant volumes of illegal products continue to enter the market without hindrance.

Questions for the tax authority leadership

The appointment of Ruslan Tsvihun as head of the Main Directorate of the State Tax Service (STS) in the region was a landmark moment. During his tenure, the volumes of illegal production and distribution of tobacco products have noticeably increased.

Against the backdrop of increased activity by enterprises suspected of involvement in shadow schemes, the tax authority has focused its efforts on something entirely different: tightening measures against small businesses. Such an approach raises doubts about the efficiency and integrity of the management.

Why do large-scale schemes go unpunished?

The facts indicate that the fight against the shadow tobacco market in the region is being conducted selectively, if at all. Instead of investigating the activities of major producers and blocking distribution channels, the emphasis is placed on developing new ways to tax small businesses, which contribute only a small fraction of budget revenues.

Risks for the state

The impunity of large businesses operating in the illegal sector threatens the country's economic stability. According to expert estimates, annual losses to the state budget from the shadow tobacco market amount to billions of hryvnia.

Given the STS's role in combating illegal business, the situation in Ternopil Oblast is becoming emblematic. Without real steps to identify and eliminate corrupt links, such as those connecting the tax authority with Marshall Finest Tobacco Ukraine LLC, controlling the market will be impossible.

Conclusion

The activities of the Ternopil Oblast tax service raise questions not only for the public but also for law enforcement agencies. In a situation where small businesses face increasing tax pressure, major players continue to earn billions in violation of the law.

To solve the problem, it is necessary to strengthen oversight of the activities of tax authorities and conduct transparent investigations into the operations of enterprises linked to the shadow tobacco market. Without this, the fight against counterfeit products will remain merely a matter of words, and the state budget will continue to suffer colossal losses.