The Finance Ministry of Ukraine has proposed that royalties for commercial gas production will be reduced from 55% to 29% (well depth of up to 5 kilometers) and from 28% to 14% (well depth of over 5 kilometers) from January 1, 2016, according to the presentation of the tax reform drawn up by the ministry.

The ministry also proposed that lower gas royalties are introduced from 2018 – 20% and 10% (depending on well depth). The ministry said that along with the reduction of royalties from January 1, 2018, the extra charge of 15% for profit tax for gas producers will be in effect.

The ministry also proposed that royalty for transportation of ammonia via Ukraine is increased by 3.8 times (from $0.64 to $2.4 per tonne each 100 kilometers). It is proposed that royalty for transit transportation of gas using pipelines via Ukraine ($0.21 per tonne each 100 kilometers) is revoked.