14:57 30.11.2021

Rada adopts 'resource' bill to raise number of taxes without amendment on rent on ore

3 min read
Rada adopts 'resource' bill to raise number of taxes without amendment on rent on ore

The Verkhovna Rada of Ukraine adopted as a whole bill No. 5600 on the balance of budget revenues (the "resource" bill) with amendments to the Tax Code, which proposes an increase in the rates of a number of taxes, but without the ore rent adjustment.

The bill at second reading was supported by 255 people's deputies with the required 226 votes.

At the request of MP David Arakhamia, an amendment concerning the rate of rent on ore was excluded from the bill.

"I ask you not to support amendment 97, as it is related to the formula for calculating the rent on ore, and the current world prices do not correspond to the expectations that were at the initial stage," Arakhamia said.

Thus, the amendment was not supported.

The adoption of this bill is listed in the memorandum of Ukraine with the International Monetary Fund (IMF). According to it, Ukraine has pledged to adopt this law by the end of November, which will allow next year to increase the revenue part of the budget by 0.5% of GDP.

"This is perhaps the most difficult bill for our committee this year," the head of the parliamentary committee on finance, taxation and customs policy, Danylo Hetmantsev, said from the rostrum of the Verkhovna Rada.

He added that parliamentarians submitted 11,500 amendments to the bill after its first reading.

The law, in particular, contains a rule on the exemption of new companies in mining towns for 15 years from a number of taxes within the framework of a special tax regime.

As for the administration of taxes, by the second reading the committee withdrew the rule on the requirement of a tax lien for the period of appeal of the tax notice-decision.

The law also establishes the possibility, by a court decision, to temporarily restrict the right of entry of the head of a company that has tax debt. At the same time, by the second reading, the deputies increased the term for non-repayment of such a debt from 30 to 240 days.

The law also establishes restrictions on the write-off of losses by large payers of income tax, namely, losses are taken into account until they are fully paid, but in parts of 50% annually.

The law exempts producers of poultry other than chickens from income tax.

At the same time, by the second reading, the norm on taxation of VAT on the second and subsequent purchase of housing was removed from the draft law. At the same time, amendments to the Tax Code provide for the taxation of transactions involving the sale of the third or more real estate objects at the rate of personal income tax (18%) of the net tax.

The law until 2025 extends the VAT installment benefits for the import of equipment.

In addition, the bill allows civil servants who have not performed public functions since 2010 to take part in the tax amnesty.