The CEO of Ukraine’s largest technology retailer “Comfy,” Ihor Khyzhnyak, accused competitor companies Yabko, Techojizhak and Yabluka of selling iPhones in Ukraine before the official release date on his Facebook page. This might mean that these retail chains had imported the new appliances illegally.
The issue of enforcing tax compliance becomes ever more pressing for Ukraine’s authorities as the country struggles to find ways to finance its defense costs, currently estimated as being around of Hr.2.2 trillion ($53.66 billion).
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Ukraine needs to address the need for additional spending, especially on social services and support for business, but for now, the country lacks the necessary revenue streams.
Since the start of Russia’s invasion of Ukraine, this has mostly been covered by Western financial aid, but now that’s already shrinking.
Western allies have confirmed $15 billion funding out of Ukraine’s stated $38.4 billion financial needs for 2025, the Ministry of Finance and the parliament's Budget Committee stated.
It might be business’ turn to bully tax evaders and Comfy took the initiative.
Comfy, under its official name “Comfy Trade LLC,” is Ukraine’s fifth largest retailer with a 2023 revenue of Hr.27.63 billion ($690.75 million).
Its CEO attacked smaller technology retail chains, naming Yabko, Techojizhak and Yabluka, for supporting the shadow economy by distributing iPhones without paying state taxes, issuing official tax receipts and providing guarantees for only a month instead of a year, all of which are prerequisites to operate legally on Ukraine’s market, Khyzhnyak told Forbes Ukraine.
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Illegal iPhone distribution – known internally as the selling of “gray” iPhones – which allows the companies involved to evade taxes and sell with a lower price offers a big advantage for those involved.
The CEO of Foxtrot, another of Comfy’s competitor, Oleksii Zozulia, said the share of illegally sold Apple smartphones had increased from 60% market share in 2021 to 71% in 2023, despite the full-scale war.
Khyzhnyak claims the state budget is losing more than Hr.6.4 billion ($160 million) in taxes annually because of the practice.
Forbes Ukraine reported that Ukraine’s economic law enforcement agency, the Bureau of Economic Security, is investigating criminal cases related to tax evasion by the distributors accused by Comfy for which Khyzhnyak says he will provide the information he holds.
Forbes Ukraine asked for comments on the accusations from Yabko, Techojizhak and Yabluka to which only Techojizhak responded, calling Comfy’s accusations a competition tool.
“We see this situation as a competitive struggle and an attempt to associate our brand with smuggling, which neither the brand nor its franchise partners have any connection," Oleksii Hulii, the company’s owner said.
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