Business news from Ukraine

FERREXPO PAID OVER UAH 2.45 BLN OF TAXES FOR 9 MONTHS

Enterprises of Ferrexpo (Poltava Mining, Yeristovo Mining and Belanovo Mining) paid more than UAH 2.45 billion of taxes and charges to budgets of different levels by results of January-September 2019, which is more than for the corresponding period of year 2019.
According to the structure of the enterprises’ payments, during the period under review, Poltava Mining (Ferrexpo Poltava Mining, FPM, belongs to Ferrexpo) transferred taxes and contributions to the budget of Ukraine for more than UAH 1923.0 million, Yeristovo Mining (Ferrexpo Yeristovo Mining, FYM, belongs to Ferrexpo) – more than UAH 508.5 million, Belanovo Mining (Ferrexpo Belanovo Mining, FBM belongs to Ferrexpo) – more than UAH 13.5 million.
Poltava Mining paid to the local budget more than UAH 221.8 million, to the regional budget – more than UAH 228.4 million, to the State Budget of Ukraine – more than UAH 1206.2 million (13%, 14% and 73% accordingly). The unified social tax of the enterprise exceeded UAH 266.3 million.
Yeristovo Mining transferred to the local budget more than UAH 57.8 million, to the regional budget – more than UAH 73.0 million, to the State Budget of Ukraine – more than UAH 326.0 million (13%, 16% and 71% accordingly). The unified social tax of the enterprise exceeded UAH 51.7 million.
Belanovo Mining paid to the local budget more than UAH 6.1 million, to the regional budget – more than UAH 0.8 million, to the State Budget of Ukraine – more than UAH 3.3 million (60%, 8% and 32% accordingly). The unified social tax of the enterprise exceeded UAH 3.3 million.
For nine months of 2020, FPM paid the corporate profit tax in amount of more than UAH 955.3 million, environmental tax – more than UAH 88.7 million, land tax – more than UAH 42.7 million, income tax – more than UAH 232.5 million, other taxes and contributions – more than UAH 51.7 million. Royalty payments exceeded UAH 285.5 million.
Yeristovo Mining paid for the same period environmental tax in amount of more than UAH 26.5 million, personal income tax – more than UAH 46.7 million, income tax – more than UAH 94.7 million and other taxes and contributions – more than UAH 51.7 million. Royalty payments exceeded UAH 194.5 million.
Main payments of Belanovo Mining to the budget for nine months of the current year included land tax in amount of more than UAH 3.7 million and personal income tax – more than UAH 3.6 million.
Notes to Editors:
Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine. It has been mining, processing and selling high quality iron ore pellets to the global steel industry for over 40 years. In 2019, the Group produced 10.5 million tonnes of pellets ranking it as the 3rd largest exporter of pellets to the global steel industry with a market share of approximately 8%. Ferrexpo has a diversified customer base supplying steel mills in Austria, Germany, Japan, South Korea, Taiwan, China, Slovakia, the Czech Republic, Turkey, Vietnam and America. Ferrexpo has a premium listing on the main market of the London Stock Exchange under the ticker FXPO.

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PHILIP MORRIS ASKS UKRAINIAN PRESIDENT TO SUPPORT ALTERNATIVE PROPOSALS ON RISING TAXES ON TOBACCO

PrJSC Philip Morris Ukraine, a large tobacco producer, proposes to replace a 320% tax increase on tobacco products for electric heating, which should come into force on January 1, 2021, with an annual increase of 50% during 2022-2025 or 200% in 2021 and 20% in subsequent years.
According to the published letter of Philip Morris Ukraine CEO Konstantinos Salvaras to the president of Ukraine, a gradual increase in the excise tax on tobacco products for electric heating by 50% per year or by 200% in 2021 and by 20% in subsequent years will save the market from a total transition to the shadows and bring more revenues to the state budget than a sharp increase in the excise tax rate by 320%.
“We urge the government to move away from the practice of unpredictable and unstable tax policy, which affects both the attitude of investors and the economy of the country. Tax increases should be gradual, not fourfold,” the Philip Morris letter says.
The company reported that the government and academia share the vision of a gradual increase in the tax rate. Thus, the Ministry of Economic Development, Trade and Agriculture supports the idea of increasing the rate on tobacco products for electric heating by 50% from January 1, 2021 and by 50% during 2022-2025, and a study conducted by the Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine shows that a gradual increase in the excise tax on tobacco products for electric heating will provide additional UAH 18.7 million of revenues to the state budget compared to a sharp increase in the tax rate.
According to Philip Morris’ estimates, a sharp increase in excise taxes will lead to the loss of potential and real investments, state budget revenues, an increase in the level of smuggling, and a conflict with EU legislation.

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INTERPIPE INCREASES PAYMENT OF TAXES IN Q1

Interpipe international vertically integrated pipe and wheel company in January-March of this year increased payment of taxes and fees to the budgets of all levels and extra-budgetary funds by 3% compared to the same period last year, to UAH 803 million.
The company said on Facebook the amount of contributions to the state budget totaled UAH 547 million, to local budgets some UAH 147 million, another UAH 109 million was transferred as social security tax.
“The Ukrainian industrial company Interpipe and its assets make a significant contribution to filling the state treasury. Last year we updated the record for paying taxes and fees, but we do not stop there: according to the results of the first quarter of 2020 some UAH 803 million were transferred to the budgets of different levels. In addition, given the increased burden on regional budgets due to coronavirus, Interpipe refused tax holidays provided by the Verkhovna Rada and allocated UAH 17 million for the anti-crisis program to combat COVID-19 in Dnipro and Dnipropetrovsk region,” the company said.
As reported, Interpipe in 2019 increased payment of taxes and fees to the budgets of all levels by 50% compared to 2018, to UAH 3.25 billion. At the same time, the amount of contributions to the state budget totaled about UAH 2.167 billion (an increase of 62%), to local budgets about UAH 625 million (38% more). Another UAH 462 million (21% more) was transferred as social security tax.

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DONBASENERGO PAYS UAH 701.5 MLN OF TAXES IN 2019

PJSC Donbasenergo in 2019 paid UAH 701.5 million of taxes and other mandatory payments to the national and local budgets, the press service of the company has reported. Thus, UAH 665.7 million of VAT, environmental tax, the royalty for the use of water resources and other taxes was paid to the national budget. Some UAH 35.8 million (land tax, property tax and other taxes) was paid to the local budget.
The company said that according to the Tax Code, starting from July 2019 Donbasenergo as an electricity generating company paid UAH 80.8 million of the excise duty, which is set at 3.2% of the cost of each kWh of electricity generated.
Donbasenergo owns Starobesheve (located in the occupied territory) and Sloviansk TPPs with a total installed capacity of 2,880 MW, in particular Sloviansk TPP’s capacity is 880 MW. At the end of March 2017, the generation company announced the loss of control over the operation of Starobesheve TPP, as well as part of structural units located in the temporarily uncontrolled territory.
PrJSC Energoinvest Holding owns a 60.86% stake in Donbasenergo, another 25% is owned by the state.

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STATE-RUN NAFTOGAZ’S ENTERPRISES TRANSFER UAH 83.7 BLN IN TAXES TO BUDGET

NJSC Naftogaz Ukrainy and its member companies paid UAH 83.7 billion in taxes and dividends to the national budget in January-September 2019, the company’s press service said.
Budget payments from the group accounted for about 15% of total budget revenue for the nine months of 2019, the company’s press service said.
As reported, in 2018 Naftogaz and its affiliated companies paid UAH 137.8 billion in taxes and dividends to the state budget in 2018, which was 27.2% more than in 2017. In particular, dividends were paid in the amount of UAH 29.5 billion, oil and gas production royalties totaled UAH 28.5 billion, VAT payments stood at UAH 37.4 billion, payments of corporate profit tax were UAH 23.9 billion.
Naftogaz brings together the country’s biggest oil and gas producers. It holds a monopoly on the transit of natural gas and its storage in underground facilities and on the transportation of crude oil by pipeline throughout Ukraine.

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UKRAINIAN PM HAS NO INTENTION TO RAISE TAXES

Prime Minister of Ukraine Oleksiy Honcharuk states that the government does not intend to raise taxes.
“We as a government do not plan to raise taxes, this is the wrong way. The state should not increase the amount of resources that it passes through itself,” Honcharuk said on the air of ICTV Channel on Monday evening.
According to him, the state should create incentives so that people are not afraid to invest in their business, and then develop it.