Ukraine’s Cabinet Appoints New Tax Service Head, Without Competitive Hiring
29 April, 2020

The Cabinet of Ministers has appointed Oleksiy Lyubchenko to the post of head of the State Tax Service (STS), though the Ministry of Finance insists that it is only a temporary appointment.

This was reported by the press service of the Ministry of Finance.

READ MORE: Ukraine's Customs and Tax Services Heads Nefyodov and Verlanov Dismissed

Finance Minister Serhiy Marchenko has stated that they would only conclude a contract with Lyubchenko for the duration of the quarantine.

“After the quarantine is over, we can return to competitive selection,” he said.

Marchenko has also voiced the tasks for the new head of the STS, emphasizing that it is the precise implementation of these tasks that will be the “indicator of success”.

In particular, Lyubchenko should:

1. Submit a strategy for reforming the STS and an action plan for the timing of implementation within 10 days;

2. Publicly report the results monthly;

3. Provide a definitive plan of revenues to the state budget;

4. Simplify all procedures as much as possible and make the tax service truly a service for business and citizens.

In clarification on the third paragraph, the Finance Minister noted that "pressure on business is unacceptable."

In 2009-2011, Lyubchenko was the deputy head of the State Tax Administration, under the presidency of fugitive ex-president Viktor Yanukovych.

Yulia Klymenko, an MP from the opposition Golos party, has already stated that Lyubchenko cannot become the head of the STS, since he falls under the law on lustration, intended to prevent Yanukovych-era officials from regaining power.

It should be noted that the appointment of the head of the tax without competitive hiring only  became possible after the adoption of the law on amendments to the 2020 state budget by Parliament, which, in particular, prescribed a new procedure for appointing civil servants for the quarantine period.

READ MORE: Ukraine’s 2020 Budget Is Changing Due to the Coronavirus

The new rules provide for not holding full-fledged competitions during quarantine, but instead appointing officials by concluding a contract. Such an official shall work "for the period of quarantine and until the day on which the subject of the appointment or the head of the civil service in the state body determines the winner of the competition." In simple terms – until a new permanent leader is selected through full competitive selection (after quarantine). It is not specified how long the hiring process may last.

Also, on April 29, the Kyiv District Administrative Court opened court proceedings due to the cancellation of the competitive selection for the post of head of the tax service.

This comes after the previous head of the Tax Service Sergey Verlanov was dismissed at an extraordinary Cabinet meeting on April 24. Marchenko initiated this dismissal, as the tax service is under his purview.

Verlanov himself called his dismissal political and filed a complaint with prosecutors against the former Finance Minister, Ihor Umansky, who had previously accused the tax authorities of massive corruption.

READ MORE: Ukraine's Parliament Dismisses Umansky, but Finance Minister Position Remains Vacant

Ukraine’s Parliament has set up a temporary commission of inquiry to investigate Umansky’s allegations of possible corruption in tax and customs on April 24.

Subsequently, the Cabinet published a vacancy for this position. Documents were to be submitted until April 27. The advertised salary amounted to 29,400 hryvnias ($1,080) per month.