The increase in costs will negatively affect the financial condition of mining companies, experts said

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The increase in rates of rent on extraction of iron ore from 8% to 11-12% in accordance with the law on amendments to the Tax code that will increase the costs of mining enterprises 42% and can have critical consequences for the industry. This is referred to in the material GMK Center “Sentence No. 1210: how the controversial law will affect iron ore industry”.

The article notes that the signed may 21 by President law “On amendments to the Tax code of Ukraine concerning improvement of tax administration, elimination of technical and logical inconsistencies in the tax legislation” (№466-IX) provides for an increase in rates of rent on extraction of iron ore depending on the prices for iron ore in China.

According to the analyst GMK Center Andrei Glushchenko, the rate increase will increase expenditure on payment of rent of mining enterprises for us $64 million per year. Such a significant increase in costs will negatively affect the financial condition of mining companies, especially in conditions of economic crisis caused by the pandemic, he said.

The President OP “Ukrmetallurgprom” Alexander Kalenkov stresses the need for immediate changes to the Tax code regarding the rent – both in terms of the change of the tax rate, and in terms of the nuances associated with its administration.

The law “On amendments to the Tax code of Ukraine concerning improvement of tax administration, elimination of technical and logical inconsistencies in the tax legislation” (№466-IX) was adopted on 16 January 2020. Like bill, he wore No. 1210, it has been criticized by largest business Association.

President Vladimir Zelensky immediately after the signing of the law appealed to the Cabinet with a proposal jointly with representatives of business associations and experts to develop and amend, was reported by the press service of the head of state.

In particular, we are talking about the improvement and simplification of administration of taxes and fees, clarity of tax rules and unification of terminology. The bill, the Cabinet should submit to the Parliament by the end of this year. The European business Association has said it is ready to propose changes to the document after its signing, said GMK Center.


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