Parliament passes at first reading draft law on cutting gas royalty

10:58, 07.10.2015 1 min read

The Ukrainian parliament has passed at first reading draft law No. 2835 on cutting royalties collected for natural gas production.

The document drawn up by seven MPs that amends the Tax Code would supported by 228 votes.

According to the draft law (text available as of September 14), it is planned to reduce royalty for private companies from 55% to 29% for up to five kilometers of depth, and from 29% to 14% for over five kilometers of depth.

In contrast to the draft law drawn up by the Cabinet of Ministers and not supported by lawmakers, it is proposed to cut the royalty for public joint-stock company Ukrgazvydobuvannia from 70% to 29% for up to five kilometers of depth.

The document also foresees the reduction of the additional levy to the tariff for natural gas sold to households – from 4% to a zero.

However, for companies which produce gas under PSA with state enterprises it is planned to retain the royalty at 70%, while in the previous draft law on royalties it was planned to cut the royalty from 70% to 29% and 14%.