Ukrnafta boosts tax payments by 30% in 2017

The amount included over UAH 6 billion ($210 million) in rent tax, also known as royalties, it said.

"As of December 31, 2017, Ukrnafta carried on its books UAH 11.85 billion [$414.8 million] in overdue tax debt, whereas as of December 31, 2016, this amount was UAH 11.95 billion [$418.3 million]," the press service said, adding that Ukrnafta's approach to recording and reporting tax debt is consistent with the Ukrainian law and is supported by an independent audit.

Ukrnafta also noted that in 2017 the State Fiscal Service (SFS), acting at own discretion, used the company's current tax payments to offset the tax debt from the previous periods.

Read alsoUkrnafta wants to sell gas on Ukraine's domestic market"At the same time, the SFS unlawfully imposed a 20% fine that was then added to the amount of tax debt. This led to artificial inflation of the company's tax debt and explains why the SFS issued monthly reports about increase in the tax debt since the beginning of 2017 whereas Ukrnafta was paying its taxes in full," it said.

According to Ukrnafta, it has not yet received any meaningful response from the government, namely the Finance Ministry, on its proposal to restructure and fully repay the tax debt within three years.

As UNIAN reported earlier, the national oil and gas holding Naftogaz of Ukraine in the spring of 2015, published its financial report for 2012-2013, admitting that it had used at its discretion 10 billion bcm of gas belonging to Ukrnafta.

Because of Naftogaz's refusal to repay the debt to Ukrnafta for this gas and the failure of auctions to sell crude oil, Ukrnafta was incurred a tax debt owed to the state.

Read alsoUkrnafta submits new bailout plan to State Fiscal Service for approvalAccording to the company's report for 2016, the tax debt was estimated at UAH 13.2 billion [$462 million].

In May 2017, Ukrnafta sent a new financial recovery plan to the SFS for approval, according to which it will service current tax liabilities while payments for overdue tax debts will be subject to three-year restructuring.

UNIAN memo. Ukrnafta is the largest state-owned oil and gas company in Ukraine. It accounts for about 70% of oil and condensate production, and 11% of gas extraction in the country. Ukrnafta is one of the key players in the retail market for petroleum products in Ukraine: the company owns more than 560 fuel filling stations throughout the country.

Ukrnafta's shares are listed on the Ukrainian Exchange (UX) and the PFTS Stock Exchange (Kyiv). Depositary receipts for company's shares are traded on the Frankfurt Stock Exchange.