Ukraine's Verkhovna Rada has passed bill No. 5132 amending the Tax Code to provide for the balance of budget revenue in 2017. The document envisages the increase of alcohol and tobacco excise duties, deposit use and radio frequency spectrum royalties. The adoption of the bill was required for approving the 2017 national budget.

An Interfax-Ukraine correspondent has reported that some 235 lawmakers backed the bill.

Initially the document was discussed following a dramatic scenario, according to First Deputy Speaker of Verkhovna Rada Iryna Gerashchenko: the parliamentarians failed to confirm seven amendments earlier approved by the profile tax committee.

When Ukrainian Prime Minister Volodymyr Groysman appeared in the session hall, four amendments were passed, and three most disputable amendments were rejected in consultation with the prime minister. The proposals to introduce the automated supervision system to oversee the appraising process, to increase the excise duty on spirit by 12% instead of the proposal to boost it by 20% and to expand the access to the 2% beneficial fossil fuel production royalty were removed.

"I am totally against any opportunities for corruption, so that the government could determine what wells are hard to develop and what not," Groysman said when he insisted on removing the 2% beneficial royalty.

Rada approved the reduction of oil production royalty from 45% to 29% (for wells over 5,000 meters deep – from 21% to 14%) and the refusal to cut the royalty for new gas wells to 12%. The lawmakers backed the restriction for distribution of budget subsidies to UAH 150 million per agricultural producer from January 1, 2018.

The bill says that the excise duties on wine and low-alcohol beverages, radio frequency spectrum royalties (apart from mobile communications) will be increased. Environment tax will grow by 12% (the projected inflation) and the specific rate of the excise duty for tobacco - by 40% and the ad valorem rate will remain unchanged being 12%.

The deposit, water and forest use royalty was increased by 10.4% (the projected growth of wholesale prices), the pecuniary appraisal of nonfarm land was increased by 6%, fixed agricultural tax – by 14%, while for farmland it was left unchanged.

The document also amends the Tax Code for the final switch of farmers to the general taxation for VAT.