Payments of royalties from iron ore production almost five times up in 2012-2018

Ukrainian steelmakers' association Ukrmetprom says that payments of royalties from mining iron ore increased by almost five times from 2012 to 2018.

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At the same time, payments of royalties from minerals of state importance, including ore, increased by only 1.6 times, while those from crude oil production grew by 1.1 times.

The Servant of the People Party parliamentary faction proposes change in an approach to the formation of a tax base when calculating royalties for iron ore production, which will again lead to an increase in royalty rates from 8.8% to 10%. The relevant proposals are stipulated in bill No. 1210 introduced by Ukrainian MP Danylo Getmantsev.

"What is behind such an explicit desire to tax one of the most transparent mineral mining businesses in Ukraine to death? Maybe one should take a closer look at other minerals, such as crude oil, amber, gravel, and sand?" Ukrmetprom President Olerksandr Kalenkov said on September 16.

In particular, the shadow amber market in Ukraine is estimated at US$500 million a year. The lion's share of amber is exported in the same way as iron ore produce. However, unlike raw iron ore, such sales are not reported in customs statistics, head of Centre for Political Analysis Volodymyr Golovko said.

According to Golovko, the State Tax Service's closer attention to businesses working in the shadows and all sorts of "tax pits" and semi-illegal schemes will become a more effective tool to boost tax payments to the budget.