Scheme involving fictitious transactions worth 1.1 billion hryvnias has been uncovered in road construction sector: budget lost 243 million hryvnias in VAT, – Kravchenko. INFOGRAPHICS
Prosecutors, working alongside law enforcement agencies, have uncovered a VAT evasion scheme in the road construction sector.
This was announced by Prosecutor General Ruslan Kravchenko on Telegram, according to Censor.NET.
Deliberate tax evasion
According to the investigation, five companies linked to the beneficial owner of a major road construction firm allegedly recorded purchases of bitumen, crushed stone, and other construction materials worth over 1.1 billion hryvnias between 2020 and 2023.
In reality, these deliveries never took place.
"On paper, the suppliers were selling materials for road repairs. In reality, however, they were engaged in entirely different activities and were trading in food, footwear, tyres, and steel reinforcement. It was based on such fictitious transactions that a tax credit was generated, which allowed tax liabilities to be significantly reduced," the statement reads.
Budget losses
According to Kravchenko, as a result, the budget lost out on over 243.8 million hryvnias.
It was also established that these same companies carried out transactions worth over 4.3 billion hryvnias with the main road construction company, mixing genuine supplies with ‘paper’ ones. In this way, fictitious documents were incorporated into genuine business transactions and created the appearance of legitimacy.
The fact of deliberate tax evasion has been confirmed by tax audits and the findings of forensic examinations.
Suspicions
As noted, one of the company directors has already been notified of the charges in absentia. A search was carried out at his place of residence.
Two other suspects are currently abroad. Measures are being taken to bring them to justice.
"If a company secures state contracts worth billions and then, through fictitious transactions, evades taxation on hundreds of millions of hryvnias, that is no longer business. It is a fraud against the state and all taxpayers.
Almost 244 million hryvnias – that is money intended for defence, security, hospitals, schools, and the country’s reconstruction.
I am convinced that such actions must be met with accountability, regardless of the scale of the business, the positions held or the connections involved," the Prosecutor General emphasised.
