Full launch of Ukraine's income e-declaration system delayed

Full launch of Ukraine's income e-declaration system delayed
Few people in the Ukrainian government are interested in the full launch of the income declaration system.
By bne IntelliNews August 16, 2016

Ukrainian Prime Minister Volodymyr Groysman has urged government institutions to launch the electronic system of income declaration by state officials at full capacity as soon as possible, the cabinet's media office said in a statement on August 15.

The National Agency for Prevention of Corruption announced it has launched the system of as of August 15. However, the system has failed to receive proper data protection certification, raising questions about its legal validity and drawing criticism from anti-corruption activists and Ukraine's western backers.

"The electronic declaration system was launched today [on August 15], though, unfortunately, only in a test mode. According to the National Agency for Prevention of Corruption, the software has sufficient programme modules to submit, store and post income declarations, as required by law, and can begin functioning," Groysman said.

The premier added that the Ukraine is currently "probing the case to identify those responsible for the electronic declaration system not fully operating in a timely manner. Based on its results, we will draw conclusions."

The head of Support Group for Ukraine (SGUA) at the European Commission Peter Wagner tweeted on August 15 that the EU Delegation to Ukraine insists on implementing the technical security certificate for the e-declaration system.

On the same day, UK Ambassador to Ukraine Judith Gough underlined that the launch of an incomplete e-declaration system risks damaging the country's anti-corruption efforts progress and "Ukraine's reputation". "Hope for the full launch soon," the diplomat tweeted.

"Given the widespread corruption, few people in the Ukrainian government are interested in the full launch of this system, which will put many high-ranked officials under the threat of being prosecuted," Alexander Paraschiy at Kyiv-based brokerage Concorde Capital wrote in a research note. "Once again, the Ukrainian public can only depend on pressure from Western officials to ensure the anti-corruption mechanisms are implemented."

Concorde wasn't able to confirm whether International Monetary Fund (IMF)'s financial support is indeed linked to the successful launch of the e-declaration system, but the brokerage "shares the view... that EU officials can freeze all their programmes with Ukraine due to this current delay".

The IMF had intended to release $1.7bn to Kyiv in the third tranche of funding in July, after reaching agreement with the Ukrainian authorities on policies needed to complete the next review under the programme. However, the IMF's board did not consider its Ukraine funding in July.