Business complains about the lack of real dialogue with the new government

An increase in the rent for iron ore extraction by 4.5 times will cause losses to the state by billions of hryvnias, as well as lead to a decline in the industry. This opinion was expressed by the head of the Federation of Metallurgists of Ukraine (FMU) Sergey Belenky, commenting on tax changes in the framework of bills No. 1012 and 1012-1.
“We were promised that some of our proposals will be taken into account between the first and second reading, but bills 1012 and 1012-1 will be accepted. Therefore, unfortunately, we have to admit that there is no dialogue between the authorities at the level of the Verkhovna Rada and business. Coordination between the Rada and the government isn’t either, ”he commented on the discussion of these bills with people's deputies.
According to Belenky, Prime Minister Alexei Goncharuk, on the one hand, says that changes to the Tax Code will be discussed in the spring, and will not be adopted until 2021, while the parliament will make drastic changes.
"Our costs due to a 4-5-fold increase in tariffs will increase by at least 8.5 billion hryvnias per year," said the head of the FMU.
He is confident that such changes can simply destroy the industry. At the same time, he notes that such a “strange interest” is observed by the Rada only in iron ore, while the rent for other types of raw materials does not increase.
“We calculated that if the state receives an additional 8.5 billion hryvnias from rent, it will lose about 11.5 billion income taxes from these same enterprises. Since production volumes will be reduced by at least 20%, we will lose a significant part of export - China completely, partly to the EU countries. Perhaps only the domestic market will remain profitable due to cheaper delivery, "concluded Belenky.
As you know, bill No. 1210 proposes not only to increase the rent for iron ore extraction from 8% to 10%, but also to increase the lower threshold for the profitability of iron ore from 14-25% to the double discount rate of the NBU - today it is 33%.

In addition, it is proposed to take the cost of marketable products (including concentrate, sinter, pellets) with Fe62-67% instead of the cost of mined ore with Fe16-30% as a base for taxation.

 

Source: https://www.rbc.ua