Zelensky signs high-profile ‘Anti-Akhmetov’ tax bill into law

18 December 2021, 05:02 PM

Ukrainian President Volodymyr Zelensky signed bill № 5600, known as the “resource tax bill,” into law on Dec. 18. The bill aims to bolster the fiscal revenue of state budgets and combat tax avoidance, the president’s office said.

Some specific provisions in the bill include:

·       Inflation indexing for certain taxes.

·       Changes to VAT, tobacco and alcohol duties, and to resource royalties related to iron ore mining.

·       Major taxpayers will be limited in using tax loss carryover.

·       Increases to some “green” taxes.

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As Rinat Akhmetov, Ukraine’s richest man, has most of his wealth generated by steel production, this bill was often referred to as an “Anti-Akhemtov bill” by some in the Ukrainian media.

A proposal to amend the bill, easing the tax burden specifically on the iron mining business, was rejected by MPs on Nov. 30.

Parliament eventually passed the bill with the iron ore rent provision intact. This specific provision indexes the tax rate on iron ore to the commodity’s international market price (with higher iron ore prices corresponding to higher levied taxes), and was introduced by the Finance Ministry.

The bill also introduces a land value tax, to be levied on the basis of minimal potential income from a given plot of agricultural land. Small-scale private gardens, plots in urban areas, and land assets in the temporarily occupied territories will all be exempt from this new tax.

In addition, the new law includes procedures for fiscal dispute resolution and tax relief.

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