Business news from Ukraine

There were about 40 companies operating in Odessa ports, which exported agricultural products without paying taxes – investigation

The head of the Odessa regional military administration Oleg Kiper in August 2023 by his order strengthened customs control in the region when exporting agricultural products for export, at the same time on the market of export of agricultural products appeared about 40 companies with signs of fictitiousness, reported hromadske in the investigation “Grain Baron”.
The publication noted that through the ports of Odessa in 2023 passed 85 percent of the country’s agro-exports.
When analyzing the data of the Ukrainian customs, access to which is provided by the international service ImportGenius, journalists found 40 companies with signs of fictitiousness, which entered the agro export market after the Odessa OSA established “manual control” over it.
These companies started exporting grain after August 2023. They have never engaged in exports before, were founded or changed owners in 2023, are not part of well-known agroholdings and do not own land.
“The largest by export volume of these firms has the same phone number as another 139 legal entities. And in second place is a company whose founder is probably a psychologist from Uzbekistan, for whom 20 legal entities have been registered in Ukraine over the past two years,” the investigation said.
“Suspicious” companies for the last quarter of 2023 exported through the ports of the Odessa region about 800 thousand tons of agricultural products worth about $ 150 million, or 6 billion UAH, says the publication and recalls that the head of the Odessa Regional State Administration explained the establishment of manual control by the need to fight against one-day companies and so-called “black exports”.
Such one-day companies export grain and do not return foreign currency proceeds to the country, do not pay taxes, have a fake director and do not have an office. After several transactions with a budget of several million dollars, the company disappears.
The chairman of the All-Ukrainian Agrarian Union “Agrarnaya Rada” Dmytro Kohan drew attention to the fact that any manual control has increased risks of corruption.
The Odessa regional military administration refused to comment on the facts revealed by journalists.

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Tax revenues to Ukrainian budget in April decreased

Receipts of taxes, fees and mandatory payments to the general fund of the state budget of Ukraine, according to operational data, in April amounted to UAH 153.6 billion compared to UAH 164.3 billion in March and UAH 184.8 billion in February, such operational data (as of 16:00 on April 30) reported the Ministry of Finance on Tuesday.

According to its data, the most of all reduced receipts of payments from the State Tax Service – to 59.7 billion UAH from 105.7 billion UAH in March and 107.4 billion UAH in February, which is due to high payments in previous months of income tax, in particular, by banks, as well as advance payments.

It is pointed out that in April, income tax revenues amounted to only UAH 3.2 billion against UAH 60.1 billion in March and UAH 61.0 billion in February, but in April, part of its profit of UAH 38.64 billion was transferred to the budget by the National Bank, although the Ministry of Finance does not mention it in the summary.

As for other taxes, personal income tax and military levy increased to UAH 16.5 billion (UAH 15.7 billion) in April, rents to UAH 5.5 billion (UAH 1.4 billion), and excise tax to UAH 11.5 billion (UAH 9.2 billion).

Value added tax also increased to UAH 22.8 billion (UAH 18.0 billion): collected UAH 34.8 billion (UAH 29.0 billion), refunded – UAH 12.0 billion (UAH 11.1 billion).

Receipts from the State Customs Service increased in April to UAH 48.9 billion from UAH 45.8 billion in March and UAH 39.8 billion in February. As the head of the specialized parliamentary committee, Daniil Getmantsev, pointed out on Tuesday, about 2.5 billion hryvnias of additional revenue came from the unblocking of the Polish border over the past week.

The Finance Ministry pointed out that the monthly revenue estimate of the general fund of the state budget, according to operational data, was exceeded by 29.5% (+35 billion UAH), including by the State Tax Service – by 7.9% (+4.4 billion UAH), while the State Customs Service – by 14.5% (+6.2 billion UAH).

In addition, the general fund of the state budget received UAH 2.7 billion of international aid in the form of grants in April, compared to UAH 3.1 billion in March and UAH 31 billion in February.

“In general, according to operational data, at the end of April 2024, the general and special funds of the state budget received UAH 200.8 billion (UAH 225.9 billion in March and UAH 229.0 billion in February) of taxes, fees and other payments. In addition, about UAH 40.1 billion (in March – UAH 39.0 billion) in the form of ERUs was received by the Pension Fund and social insurance funds,” the ministry added, thanking taxpayers for your contribution to the support of the Ukrainian army and financial stability of the country.

Data on expenditures in April are not yet available.

As reported, the Verkhovna Rada adopted the state budget for 2024 with a deficit of UAH 1.57 trillion, or 20.6% of projected GDP. Revenues of the state budget-2024 are set at UAH 1.77 trillion (not taking into account possible grant aid), expenditures – UAH 3.36 trillion at an average annual exchange rate of UAH 40.7/$1.

State budget-2023 revenues amounted to UAH 2.67 trillion, of which grant aid amounted to UAH 0.43 trillion. Cash expenditures of the state budget for the past year exceeded UAH 4 trillion, and the deficit amounted to UAH 1.33 trillion at an average annual exchange rate of about 36.6 UAH/$1.
Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3 Subscribe to Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub.

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“Zaporozhkoks” paid over UAH 225 mln in taxes and fees to budget

Zaporozhkoks, one of Ukraine’s largest coke and chemical producers and a member of Metinvest Group, despite the difficulties caused by Russia’s military aggression, paid over UAH 225 million in taxes and fees to the budgets of all levels in 2023.
According to the company, the average number of employees at the company is about 800, with almost 14% of employees mobilized into the Armed Forces of Ukraine. Since the beginning of the full-scale invasion, eight Zaporozhkoks employees have given their lives for the freedom of Ukraine.
“Despite the full-scale war, Zaporozhkoks has been operating steadily, supporting the economy of our country and hometown. In 2023 alone, the plant produced about 1 million tons of gross coke, which is almost 30% of the total produced in Ukraine,” said Alexander Bekhter, CEO of the plant, as quoted by the press service.
It is also stated that over its 90-year history, Zaporizhkoks has produced almost 120 million tons of gross coke. The company is systematically upgrading its production facilities, including coke oven batteries, improving the quality and expanding the range of chemical products.
In particular, in 2019, a new electrode pitch granulation line was put into operation. In 2020, Zaporozhkoks put into pilot operation a new mini-cooling tower for cooling process water at the tar distillation shop. The company is successfully implementing energy saving projects, including a project to exchange secondary gases with Zaporizhstal.
As reported, Zaporozhkoks increased its blast furnace coke production by 16% in 2023 compared to 2022, up to 856.8 thousand tons from 737.4 thousand tons.
“Zaporozhkoks produces about 10% of coke in Ukraine and has a full technological cycle of coke products processing. It also produces coke oven gas and pitch coke.
“Metinvest is a vertically integrated mining group of companies. Its major shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage the company.
Metinvest Holding LLC is the management company of Metinvest Group.

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Most citizens do not have bank deposits or have significantly reduced them over past year – survey

The survey, conducted by Active Group in cooperation with the Experts Club think tank, revealed citizens’ attitudes to various aspects of social and economic life in Ukraine, including the initiative to refund part of the cost of Ukrainian goods, the government’s influence on business, the level of trust in law enforcement, financial stability of citizens, and forecasts for the hryvnia exchange rate.

A significant proportion of respondents (44%) have heard of the initiative to refund the cost of purchasing Ukrainian goods, with opinions divided on its impact on living standards. Most respondents believe that the government will increase taxes to finance this initiative.

According to Andriy Yeremenko, founder of the sociological research company Active Group, this raises concerns among the population, as most are not ready for an increase in the fiscal burden.

The study also revealed a deep distrust of government institutions (57% of citizens) and law enforcement agencies (62%) in the context of relations with business, in particular due to the lack of transparency and efficiency of their work. The majority of respondents believe that the state hinders rather than helps business to develop, and this trend has increased compared to previous months.

A significant number of Ukrainians (up to 60%) are experiencing financial difficulties, including increased debt and lack of savings for a rainy day. Respondents also expressed concern about the future of the hryvnia exchange rate, with the majority (55%) expecting it to fall.

In the context of utility bills, the vast majority (67%) of respondents believe that the level of tariffs is too high, which further emphasizes the general dissatisfaction with the financial situation and government policy in this area.

According to Oleksandr Poznyi, Director of Active Group, these results demonstrate the serious challenges faced by Ukrainian society in the context of the war and the current economic situation.

Earlier, Maksym Urakin, the founder of the Experts Club think tank, noted that in 2024 Ukraine’s public debt may exceed GDP for the first time, which poses significant risks to economic stability in the country.

For more details, please see the video at the link:

https://www.youtube.com/watch?v=8hkvHhyzGLQ

You can subscribe to the Experts Club channel here:

https://www.youtube.com/@ExpertsClub

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“Naftogaz” paid UAH 5.3 bln in taxes in February

Last month, Naftogaz Group companies paid UAH 5.3 billion in taxes, which is 17.8% more than in February 2023.

According to a report on Naftogaz’s website, the company paid UAH 4.8 billion to the state budget and UAH 0.5 billion to local budgets.

In total, since the beginning of 2024, the group has paid UAH 11.4 billion in taxes to the state.

As reported, in 2023, Naftogaz Group companies paid UAH 90.2 billion in taxes, UAH 83.4 billion of which went to the state budget and UAH 6.8 billion to local budgets.

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Kametstal increases payment of taxes and duties by one third

Metinvest Group’s Kametstal plant, which was set up at the facilities of Dnipro Metallurgical Plant (DMK, Kamianske, Dnipro region), increased its tax and fee payments by 34.8% in 2023 compared to 2022, to UAH 2.154 billion.

According to a press release, despite the economic, logistical and energy challenges of operating under martial law, Kametstal increased its tax revenues last year compared to 2022. At the same time, the budget of the city of Kamenskoye received almost UAH 605 million. The regional and state budgets received more than UAH 1.549 billion.

Kametstal’s most significant sources of revenues to the budgets of various levels are: a single social contribution of over UAH 401 million; land tax of over UAH 364.5 million; and personal income tax of UAH 352.5 million last year.

In addition, almost UAH 156.5 million of income tax and more than UAH 154 million of environmental tax were transferred to the treasury in 2023.

KAMETSTAL’s Chief Financial Officer Sergey Polukhin noted that despite the trials and tribulations of wartime, KAMETSTAL, along with other Metinvest Group companies, remains a stable producer of steel products important to the country’s economy and a responsible taxpayer.

“Today, the plant is also a reliable pillar of Kamenskoye’s economy and the largest donor to the city budget. The funds contributed by the enterprise significantly help to maintain the stability of salary payments to employees of the city’s utilities, ensure the operation of hospitals and other city programs. We work together for Ukraine and Ukrainians,” said the CFO.

It is also noted that in 2023, including associates and joint ventures, Metinvest Group paid UAH 14.6 billion in taxes and fees to the budgets of all levels in Ukraine. The rejection of tax benefits that the company is entitled to under the law made it possible to allocate additional funds to those areas where it is needed most.

As reported, in 2022, Kametstal paid UAH 1.598 billion in taxes and duties, which is higher than in 2021.

“Kametstal was created on the basis of Dnipro Coke Plant (DKKhZ) and Central Metallurgical Plant (DMK) of PJSC Dnipro Metallurgical Plant.

According to the 2020 report of Metinvest Group’s parent company, Metinvest B.V. (Netherlands) owned 100% of the shares in DCCP.

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