For the development of hydrocarbon production Ukraine should create a flexible system of taxation of subsoil users

In the long-term tax policy of Ukraine should be the most stable and economically motivated to ensure the investment attractiveness of the industry. In the context of the termination of the energy supply (eg, natural gas) from the Russian Federation to Ukraine actualized the issue of increasing domestic production and the dynamic development of the primary sector of the economy. To do this, you must attract significant private investment, because even for the exploration of mineral resources in the state budget is not enough money. Investor, in turn, is interested in participating in the prospective cost-effective projects, so it is important legislative stability and transparency of the taxation system, where the minimum price they extracted resources should include not only the production costs but also an attractive rate of return.

 

In most cases, changes in tax policy aimed at the highest possible growth of government revenue derived from the exploitation of mineral resources, and reducing excess profits subsoil. On the contrary, in a situation with a deficit of natural gas in Ukraine loyal terms of tax administration could increase the investment attractiveness of new deposits, most of which occurs at greater depths and requires considerable resources to develop.

 

World practice of subsoil use based on the existence of competition when the market itself helps to determine the conditions acceptable to the industry, and then the profit is distributed quite reasonable. Conversely, in the absence of competition, the distribution of profits depends only on fiscal conditions. In Ukraine, formed by low competitive environment in the mineral resources: the segment of private gas production does not exceed 10 - 12%, and the cost of production, many companies large enough and often reaches $ 300 per 1 thousand cubic meters of gas.

 

Tightening of the tax regime can lead to the development of the prevailing trend only large deposits, resulting in long-term government revenues from subsurface can be significantly reduced. At the same time, the change in the system of taxation of subsoil users with the development of a stable mechanism of tax payments and the use of programs, such as the needs of Ukrainian geological industry, will play a positive role in improving the budget revenues from the commodity sector of the economy and increase the volume of national production.

 

If Ukraine will be able to create a more flexible system of taxation, including different rates and takes into account the geological conditions of production in a particular field, the specificity of hydrocarbon deposits, it will provide an opportunity in the future to encourage the development of fields with deep resources and the use of more modern technical equipment.

 

Thus, the main purpose of reforming the taxation of subsoil use should be not only to provide stable income to the state budget in the long term, but also the sustainable development of the geological industry and, ultimately - the economic growth of the state.

 

 

Roman Storozhev

President of the Association "Ukrainian Subsoil users"

August "LigaBlogs"