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Ukraine to lose Chinese market due to amendments to Tax Code

The amendments to Tax Code will have disastrous consequences for metallurgic industry of Ukraine
17:49, 5 September 2019

Open source

President of Ukrmetalurtprom Oleksandr Kalenkov and Chairman of Metallurgists Federation of Ukraine Serhy Bilenky appealed to President Volodymyr Zelensky and Premier Oleksiy Honcharuk with the request to prevent the disastrous consequences due to possible amendments to Tax Code as 24 channel reported.

They stated that the bill #1210 “On amendment of Tax Code of Ukraine on the improvement of tax management, elimination of technical and logical points of disagreement in the tax legislation” raises the concern of representatives of the iron-ore mining enterprises of Ukraine.

The issue is about the change of the approach to the establishment of the base of the taxation of rent payments for mining of iron ore.

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The proposed approach will not stimulate the development of further technological repartition and increase of the quality of the production. It will easier to produce and sale primitive product with low value-added than metal production of the third repartition as the cost price of the last will become non-competitive.

Thus, Kalenkov and Bilenky noted that the adoption of the bill will negatively influence the cost price of the production. It will lead to the fact that the Ukrainian mountain-concentrating combines will lose work markets of distribution, particularly, Chinese market where over 20% of the Ukrainian export of the iron ore products is sold.

“The loss of the Chinese market equals to the close of two enterprises, Ingulets and Central mountain-concentrating combines; it is 10.000 workers of the production and 10-15.000 workers of related industries,”  the message said.

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It is also noted that Canadian Black Iron, which stated about its intention to invest $435 million to Ukrainian industry per year, will not stay at the Ukrainian market in such conditions.

Earlier Prime Minister of Ukraine Oleksiy Honcharuk announced the reform of the tax system. It should be implemented from January 1, 2021.

 

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