UNIAN
The Ukrainian state does not have reliable information on the financial flows of gas-producing companies, since accounting standards for the industry have still not been drawn up, the head of Administration of Resources, Rent and Tax Payments of the Department of Corporate Taxation of the State Fiscal Service, Olexander Shumsky, has said at a roundtable discussion in response to calls from gas companies to reduce rents.
"Currently, I do not know how the companies form their costs and how they calculate their income," Shumsky said, adding that the Ministry of Energy and the Coal Industry has failed for 15 years now to approve a corresponding law.
The State Fiscal Service also believes that in order to reduce rent payments, the ministry should perform continuous monitoring over gas companies’ fulfillment of their investment obligations.
Shumsky said gas companies complain about being deprived of the opportunity to invest in the oil and gas industry due to high rent payments, although it is impossible to verify the amount of investments made by companies. The reason for this, according to Shumsky, is the lack of principles for monitoring the fulfillment of investment projects, the development of which the Ministry of Energy and Coal Industry has failed to accomplish for six years now.
"Back in 2009 the law on oil and gas included a provision that the ministry was to develop appropriate principles for investment project formation, approve them and consider them. So we would have a database of information about the investments, their volumes, and implementation progress."
As UNIAN reported earlier, at the end of December 2014 the Ukrainian parliament adopted a law on amendments to the Tax Code of Ukraine. The law envisaged increased taxation of private oil and gas companies on a permanent basis and not as previously planned – for a year. In particular, for oil, the rates were 45% at an extraction depth of up to 5 km, and 21% for over 5 km. For natural gas that is not used for the needs of the population the fees are 55% at extraction depths of up to 5 km, and 28% for depths of over 5 km.
For companies involved in the production of hydrocarbons under joint operating agreements, regardless of the depth of resources, the production fees will be: 60% in the first quarter of 2015; 65% in the second quarter; and 70% in the third quarter.
A number of private gas companies with the shares listed on European stock exchanges have repeatedly announced plans to revise their investment programs in Ukraine after the Verkhovna Rada approved tax initiatives proposed by the government, which analysts say will lead to a decrease in drilling operations in 2015 and a decline in gas production.