Controlled export of the resource will bring additional taxes and foreign exchange earnings to the state treasury
Partial exports of Ukrainian gas will increase revenues to the state budget because production royalties will be calculated taking into account higher European prices. This was stated by Artem Petrenko, Executive Director of the Association of Gas Producing Companies of Ukraine. This was reported by RBC-Ukraine (Сергій Новіков), according to the portal PromPolitInform.
According to the Tax Code of Ukraine, when companies export gas abroad, they must pay royalties, which is a special tax, not based on internal Ukrainian pricing, but according to the rate established in Europe. According to the expert, this guarantees significantly larger deductions to the country’s general fund.
Taxes and profits
In addition to royalty payments, increased income from gas sales means a larger corporate income tax. The state will receive more funds from increased production due to the stimulus provided by external markets.
With a transparent and controlled mechanism, both sides benefit, as private companies receive guaranteed demand for part of their resources, while the state obtains additional funds necessary for the state budget.
Reserves for the heating season
Earlier it was reported that by the beginning of November, Ukraine could accumulate more than 15 billion cubic meters of gas. According to government estimates, this volume should be sufficient to get through the heating season.
The Association of Gas Producing Companies of Ukraine emphasized that controlled exports will provide the state with additional foreign exchange earnings and greater tax revenues, while producers will get funds for recovery after Russian attacks, facility protection, and new drilling.
According to Volodymyr Omelchenko, Director of Energy Programs at the Razumkov Centre, Ukraine has accumulated about 16 billion cubic meters of natural gas, which is more than 1 billion cubic meters above the planned target.
Illustrative photo: ENERGY.GOV / Public domain
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