Shadow economy exit in the jewelry market: ESBU identifies the main tax evasion scheme

 One of the key risks in the jewelry market is the artificial fragmentation of business through networks of individual entrepreneurs. This model is used by dishonest businesses to minimize their tax burden, avoid paying the unified social contribution (USC), and subsequently launder the funds through financial transactions. This was discussed during a meeting between the Economic Security Bureau of Ukraine and representatives of the jewelry industry and government agencies.

According to Oleksandr Tsyvinskyi, Director of the ESBU, the Bureau is systematically analyzing the activities of jewelry market participants and is already conducting several investigations into potential tax minimization schemes in the industry. Some materials have been referred to court, while other criminal proceedings are ongoing.

The participants paid special attention to the state of the jewelry industry. According to estimates by the ESBU analytical units, its volume in Ukraine exceeds UAH 75 billion. More than 3,000 companies and over 1,500 individual entrepreneurs operate in this field.

The discussion also covered potential steps for the industry’s transition to the formal economy and the establishment of transparent market rules.

Business representatives noted positive dynamics in the market's 'detinization.' In particular, there is a gradual improvement regarding the use of cash registers (RROs) and the issuance of fiscal receipts.

The meeting was attended by Deputy Director of the ESBU Pavlo Buzdyhan, Acting Head of the State Tax Service of Ukraine Lesia Karnaukh, Head of the State Labour Service of Ukraine Ihor Dehnera, representatives of the National Bank of Ukraine, and representatives of jewelry companies and retail chains, including Zolotyi Vik, Zolota Kraina, Stolychna Yuvelirna Fabryka, SOVA, Pandora, Zarina, and Yuvelirna Kartka.

The parties agreed to continue the dialogue and jointly develop solutions to create a level playing field for legal businesses.