Financial statements are made public in Ukraine. What are the next steps?


On May 28, the State Tax Service published financial statements of legal entities in the format of open data for the first time. From now on, they are available to everyone for free and have already appeared within major counterparty analysis services (Clarity Project, Opendatabot, and others). According to BRDO estimates, this information will be used by 1 to 3 million Ukrainians every month. Why did that happen, how well was the data disclosed and what are the next steps?

How does this work?

Ukraine has adopted very progressive laws on access to public information (Article 10-1 of the Law “On Access to Public Information”). Each government agency is required to publish available information in an open data format.

This means that the data should be as follows:

· machine-readable (based on them, it will be possible to develop IT products, data analytics, etc.);

· with no restrictions on further use;

· available free of charge and without registration.

The Law on Accounting also stipulates that financial statements of enterprises are not confidential information. The State Tax Service and the State Statistics Service actually have the financial statements of enterprises.

The Ministry of Justice also should have access to financial statements within the Unified State Registry, but it is not so due to conflicting provisions of the laws “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations” and “On State Statistics”.

The State Tax Service published financial statements of 432,000 enterprises in the form of open data — about a third of those registered. The data on 200,000 legal entities that are single tax payers are available only to State Statistics Service. The reasons for not making financial statements of other enterprises public are still unknown.

Why are financial statements made public only now?

There are several factors.

First, corporate financial statements are sold on the illegal data market. You can easily find services that sell these data or offer analytics based on them in search engines. The price tag is about UAH 300 per report. In such a way, the official publication of this information destroys the shadow data market and a source of illicit income for officials and intermediaries.

Secondly, government agencies found various legal arguments not to publish the data (the State Tax Service referred to the Tax Code, and the State Statistics Service still refers to the provisions of the Law “On State Statistics” that guarantee the confidentiality of primary statistics). A year ago, an advocacy campaign on the official publication of financial statements was launched. BRDO, Transparency International Ukraine, bihus info, and others participate in this campaign. The OpenUp community has even filed a lawsuit against government agencies.

The inclusion of financial statements in the list of open data sets by the Government (amendments to the Resolution of the Cabinet of Ministers of Ukraine No 835) became the final straw that convinced the State Tax Service to publish the data.

What does this mean in practice?

If you wanted to analyze the company’s financial performance, you had two options:

1. Write a letter to companies and ask for data (and, most likely, you would get nothing);

2. Buy data in the illegal market.

Now you have other options:

1. Download a set of data from (if you know how to work with data sets);

2. Take advantage of legal services.

In just a few days, such services as Opendatabot and Clarity Project have integrated the data into their systems. From now on, you can see the financial statement data of a legal entity just by opening its profile. This is free of charge for users.

The data are available for both corporate taxpayers and non-profit organizations. That is, the information on both LLCs, charitable foundations, public organizations, etc. is made public.

In addition to availability, machine-readable data allows analyzing a data set under various criteria and combine it with other data sets. For example, it is possible to analyze the financial performance of enterprises by industry, region, founder, and so on.

Is the implementation effective?

When making data sets public, this is a classic scenario that government agencies “forget” to publish some valuable information (for example, the Ministry of Internal Affairs does not publish VIN codes of vehicles, etc.). And so it happened this time.

· The financial statements published do not contain information about the number of employees and the name of the accountant who prepared them.

· Only the data for 2020 was made public, the information for previous years remains hidden.

· The data on 428,000 enterprises were made public, while currently more than 1.6 million enterprises were registered with the State Tax Service.

What data should be made public next?

As for financial statements, first of all, the State Tax Service should address its own shortcomings: by adding data on the number of employees to the data set and publishing financial statements for previous periods.

The second step is for the State Statistics Service to comply with the requirements of the laws and the Resolution of the Cabinet of Ministers of Ukraine No 835 and publish the financial statements available to them.

According to BRDO, the State Statistics Service does not plan to implement the Government’s decision on making financial statements public. Unfortunately, the reasons and arguments why government agencies do not want to publish data already described above remain unchanged for the State Statistics Service.

In general, Ukraine is gradually opening more and more data in machine-readable form. About three years ago, when we have been analyzing the IT market, I first learned about the obligation of government agencies to publish open data. We needed to estimate the number of companies that actually operate while being registered in Ukraine, but the information from the Unified State Registry and financial statements were not available in the open data format. During this time, the joint advocacy of activists and experts has made these two sets of business data (in my opinion, the main ones) available in an open format. We also continue our activity on making public other popular data sets, such as real-time public transport traffic and data of the Public Cadastral Map of Ukraine, and so on. However, this is just the beginning. The “open by design and default” principle should be further implemented. After all, almost all state-owned data should be available to the public in a convenient digital format.