Ukraine’s black car market: the state loses billions every year
Up to 1.2 million used cars are sold in Ukraine every year, worth around 450 billion hryvnias, notes Yefrem Lashchuk. According to experts’ estimates, a significant portion of these funds does not reach the state budget, and losses from shadow schemes amount to 17–18 billion hryvnias a year.
One of the most common schemes involves the use of forged EUR.1 certificates, which confirm the car’s origin in the European Union and allow import duties to be avoided. Of the 15,000 documents checked, only 1,078 were found to be genuine. Between 2023 and 2025, 110,000 cars were imported using this scheme, and the budget lost out on over 10 billion hryvnias.
Some market players use a mechanism to split their business across hundreds of sole traders. This allows them to reduce their tax liabilities, particularly in respect of value added tax, the single social contribution and personal income tax.
Official companies control around one per cent of the market but pay 10.4 billion hryvnias to the budget. At the same time, the shadow sector, with a total turnover of around 450 billion hryvnias, generates significantly lower tax revenues.
According to available data, 57 per cent of transactions are declared at a price below 50,000 hryvnias, although the actual value of the cars is significantly higher. Most payments are made in cash.
Among the reasons cited for the persistence of this situation is the lack of integration between the databases of the customs service, the State Tax Service and the Ministry of Internal Affairs. Checks are carried out on a selective basis, and in most cases, penalties are not enforced. If customs detects a forged certificate, the case is referred to law enforcement agencies, where proceedings can drag on for years and be closed due to the expiry of time limits.
Possible solutions include the integration of state registers, the mandatory inclusion of the VIN code in tax documents, the transition to cashless payments, and the introduction of legislative restrictions against the fragmentation of businesses.
