Initial Results of Jewelry Market Deregulation Announced by Tax Authorities

The State Tax Service of Ukraine (STS) has announced the initial results of its efforts to deregulate the jewelry market, indicating identified violations and the willingness of business owners to shift towards legal operations. This information was shared by acting head of the STS, Lesya Karnauk, as reported by the Ukrinform news agency.

According to Karnauk, tax officials held meetings with representatives from two major jewelry retail chains. During inspections of these chains, signs of tax obligation minimization were discovered, which occurred through business fragmentation. Specifically, in 253 stores, at least 100 individual entrepreneurs operating under a simplified taxation system were simultaneously conducting business. This indicates serious issues regarding compliance with tax legislation.

Throughout 2025-2026, tax authorities conducted over 50 inspections, yielding impressive results: the total amount of imposed fines reached nearly ₴70 million. Among the primary violations identified during these inspections were the absence of cash register recorders (RRO), unregistered labor, and inadequate inventory accounting. These findings point to systemic problems within the jewelry business that require urgent resolution.

The State Tax Service also noted that the companies subjected to inspections agreed to transition to operations through a single legal entity. This decision aims to regulate wage payments and fiscalize transactions, which, in turn, should reduce the risks of tax violations in the future. However, the STS emphasized that if the agreements are not fulfilled, their response will be appropriate, underscoring the seriousness of the situation.

Furthermore, it is worth noting that the majority of entrepreneurs in the jewelry market are still operating within the legal framework and adhering to the legislative requirements regarding the use of RRO and PRRO. Nevertheless, a significant portion of business entities declare very low turnover, raising suspicions among tax officials regarding the actual state of affairs in this sector.

In light of these developments, the State Tax Service will continue its efforts to deregulate the jewelry market, as this issue is extremely important for ensuring fair competition conditions and replenishing the state budget. Stay tuned for updates and news in this area, as the situation may change rapidly.

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