«It will be huge losses»: the people’s deputy spoke about the risks of new tax changes

The adoption of bill No. 1210, which raises the payment for iron ore mining, threatens the country not only with a halt to the growth of the economy and GDP, but also with the destruction of the entire mining industry, the Observer writes, citing words from out-of-parliament MP Dmitry Shpenov.

According to him, all known international organizations criticize the increase in rent for iron ore extraction. According to him, Ukraine may become the country with the highest rent.

“This is a populist approach to this bill. All international organizations, such as PricewaterhouseCoopers, have concluded that we will have the most expensive rental payments in the world for all mining companies. The cost of our production can not be compared, for example, with ore, which is mined in Australia. Ukrmetallurgprom and the Federation of Metallurgists of Ukraine also strongly opposed, «said Spenov.

He noted that stopping even one mining and processing enterprise threatens incredible losses of the Ukrainian economy. Moreover, the entire Kryvyi Rih, which, in fact, exists thanks to the mining industry, may stop.

“This is not just a loss of competitiveness of our country from an export position. From those settlements where the mining enterprises are located, people will simply disperse. They will not remain on the territory of Ukraine. For example, in Kryvbas there is a very difficult situation regarding jobs, and there will be a catastrophe in general. A huge city will turn into a settlement, because without GOKs there are no cities like Kryvyi Rih. It is a city of miners and metallurgists. This is a catastrophe, this cannot be allowed, «said Shpenov.

He added that not only the mining industry, but also the entire economy of the country will suffer from higher rates.

«There can be no talk of any economic growth that the prime minister predicts. If they close two or three mining and processing complexes, it will be a disaster,» the people’s deputy summed up.

As previously reported, bill No. 1210 proposes not only to increase the rent for iron ore production from 8% to 10%, but also to increase the lower threshold for the profitability of iron ore from 14-25% to the NBU double discount rate — today it is 33%. It is also 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.

The international audit company PWC conducted a study according to which, changes to the Tax Code enshrined in Bill No. 1210 will make rental payments in relation to the commercial profit of enterprises almost 10 times more than in Russia, and also will become higher than in Australia, Brazil and China .


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