Online store faces tax evasion probe
Tax police on April 19 opened a $900,000 tax evasion case against the director of a leading online store and temporary blocked its website from conducting business that day before the company switched to a German host provider.
Tax authorities allege that Rozetka. ua employed a classic fake invoice scheme in which goods were imported at reduced prices and then concealed the profits via fictitious companies. Authorities said they searched three company offices and three warehouses during the operation.
Since 2011, both sides have been in a legal dispute over the legality of a May 2011 document check of Rozetka.
An April 21 Rozetka statement on its Facebook page said the e-shop was running but not at full capacity. Also on April 21, tax officials announced that Rozetka top managers had agreed to pay the alleged debt to the state in exchange for being absolved of criminal liability.
Rozetka’s director, who authorities wouldn’t name, faces up to 10 years in prison under the criminal charge.
“Now the leadership of the company agreed to refund damage caused to the state, and under part four of Article 212 of the Criminal Code of Ukraine, the infringers will be released from criminal punishment,” read the tax service press release.
However, Rozetka co-owner and company executive Vladislav Chechotkin told online IT news portal ain.ua that he wasn’t aware of the alleged agreement.
The Kyiv Post has been unable to reach Rozetka company officials via phone calls and e-mailed messages. An April 24 media inquiry to tax authorities also went unanswered by the time the Kyiv Post went to press.
In an April 20 statement released by Chechotkin on Rozetka’s Facebook page, the company co-owner sarcastically accused authorities of forming a separate department to “fight advanced technologies.”
Chechotkin furthermore stated that more than 10 tax officials in Hummer sports utility vehicles stormed host company Mirohost in search of Rozetka’s server. He added that five additional “brigades” stopped more than 20 companies from conducting business and that a total of 150 tax agents took part in the April 19 raids.
The Rozetka company official said that 24 companies and 3,000 employees were affected.
Chechotkin also in the statement speculated that it was only a matter of time before he will be forced to leave the country.
An executive at a company that does business with Rozetka, said he was disturbed by the events.
“I don't think the tax officials should've behaved this way by disrupting Rozetka's business and harming its reputation," said Yuri Derevko, financial director of Leasing Information Technologies. "And if there is an ongoing legal standoff between the two then why storm their premises this way? To an outsider this looks like a raider attack on the company."
Just days later chief tax
collector Oleksandr Klymenko announced on April 23 that his agency had successfully completed a “restyling” of the methods it uses to fight the underground economy.
“First quarter results show that tax collection grew by Hr 7.4 billion over the same period as in 2011,” said Klymenko. “Our weapons are (our) intellects and analyses, and not muscle and fists.”
Klymenko emphasized that to meet the state revenue target increase of Hr 33.3 billion set by parliament this year, the gray economy money must be uncloaked.
“In the future we must employ the full range of influence over dishonest (tax) payers in order to ensure that taxation adequately accompanies economic growth,” said Klymenko in a press release.
The press release said that in February 2011 before an automated system for identifying shadow economic players was installed that “at-risk” (dishonest) taxpayers paid Hr 1.3 billion into the budget whereas in March 2012, they had paid Hr 2.9 billion.
Trade turnover in the nation’s e-commerce market is estimated at $1-$1.5 billion, according to Derevko, whose company Leasing Information Technologies, does business with Rozetka. Tax authorities estimate that the segment will reach nearly $2 billion soon.
According to market researcher GFKUkraine, 9 percent of Internet users in the nation purchased something online in the past year. In another study conducted by Polish market researcher Gemius in 2011, Rozetka was named the most widely known e-store.
Kyiv Post staff writer Mark Rachkevych can be reached at [email protected] com.