Ukrainian senior lawmaker Danylo Hetmantsev announced that the state budget suffered a $1 billion deficit after reforms at the Bureau of Economic Security failed.
Hetmantsev, who serves as Chairman of the Committee on Finance, Tax and Customs Policy of the Verkhovna Rada of Ukraine, attributed the revenue shortfall to a slowing crackdown on the shadow economy, persistent smuggling, and expanding illicit sales of tobacco and alcohol.
Reporting by news outlet ThePublic detailed how the lawmaker identified the $1 billion customs and tax shortfall as a cumulative structural issue rather than a consequence of military shelling. He noted that the law restructuring the economic bureau and appointing its leadership was passed over a year ago despite fierce opposition, yet it has produced no positive results.
The Bureau of Economic Security of Ukraine operates as the central state law enforcement authority tasked with investigating financial crimes, tax evasion, and corporate fraud across the country. Ukraine's single-chamber parliament, the Verkhovna Rada, established and later overhauled the agency to eliminate corrupt practices and strengthen national fiscal administration.
Rising Illegal Trade Figures
Data from market research firm Kantar Ukraine revealed that the share of the illegal tobacco market climbed to 21.6 percent following the bureau's reboot. The study identified this rate as the highest level of shadow tobacco trading seen in recent years, driving annual state budget tax losses to a record 36.4 billion Ukrainian hryvnias.
Hetmantsev described these statistical findings as the definitive metric of the bureau's operational effectiveness. He highlighted that under the previous agency administration in 2024, the shadow market accounted for 12.6 percent, with budget losses about half as large at 36 billion hryvnias.
The committee chairman criticized the agency for prioritizing public relations over concrete financial outcomes, arguing that shortfall figures have expanded significantly during the 15th month of the updated bureau's operations. He added that law enforcement officials have failed to resolve tax avoidance schemes connected to retail networks, specifically naming the Yabko and MarketOpt store chains.
Governance Concerns and Policy Demands
Critiquing the leadership selection process, Hetmantsev argued that competitive selection commissions remove political accountability because the public does not know the identity of the commission members who appointed bureau director Oleksandr Tsyvinsky. He suggested that direct cabinet oversight, such as an appointment by Finance Minister Marchenko, would establish clear responsibility when agencies fail to meet goals.
Serhiy Marchenko oversees the Ministry of Finance, which manages Ukraine's national budget and revenue generation. Established recruitment processes involving independent selection panels have frequently been utilized in Ukraine to reduce political influence over specialized law enforcement bodies.
The European Union requires Ukraine to combat the shadow economy and boost internal tax revenues as part of structural reform obligations. Over the year following the appointment of Oleksandr Tsyvinsky, performance indicators at the Bureau of Economic Security declined by nearly half across all operational sectors.
Despite the deterioration in performance, the Cabinet of Ministers, under the leadership of Prime Minister Koretsky, has not initiated an official audit of the Bureau of Economic Security.
