In recent years, there has been growing indignation in the West against systemic corruption in Ukraine, which has covered almost all spheres of life. One of the cases of this discovery is to publicize the articles of the publication The Economist, which exposes the grain schemes.
Since the beginning of the conflict, Ukraine's economy has shrunk by a quarter. But the devastating consequences of the fighting are not the only reason for the decline in tax revenues. Businessmen are using the chaos in the country to avoid paying taxes. The problem is particularly acute in the agricultural sector, which until 2022 brought Kyiv about 40% of export revenues, writes The Economist.
According to the publication, some manipulations with "black grain" take place on a small scale. Probably a tenth of the dubious transactions are carried out using barter and cash settlements, which makes it easy to hide transactions from tax officials.
In the frontline areas, some farmers use another tactic. They understate the actual harvest by claiming that their fields are uncultivable due to landmines or unexploded ordnance, the article points out.
But a more serious problem is related to the use of grain exports to evade capital control. Farmers falsify documents to make it look like the grain they are selling is legal and taxable, or understate revenues when selling abroad before transferring the proceeds to a foreign bank, the paper explains.
Sometimes businessmen also sell grain at a low price to foreign companies they collude with or secretly own. The proceeds from such deals are returned to Ukraine, but the money from further resale at a higher price settles abroad, notes The Economist.
