New tax innovations launched this year that encapsulate, among other things, VAT deferral when importing equipment and spare parts which have no equivalents in Ukraine and lowering the rent when new gas wells are put into operation, will promote the development and technological renewal of production in Ukraine. According to Prime Minister of Ukraine Volodymyr Groysman, the said incentives were worked out with entrepreneurs and discussed in the Parliament with the participation of a wide range of experts.
"Today it is vitally important to ensure the modernization of the national economy, to renew the fixed assets of enterprises, equipment ... To this end we introduce installment of payment for 24 months in order not to take tight credits for the purchase of equipment and to pay interests on a loan and another 1 tax (value added). We must revive the national industry and we can do it when we eliminate barriers that are being put on the introduction of new productions in the country," the Head of Government underlined.
The incentive on VAT deferral for industry was aired in the summer of 2017, based on the results of the relevant experiment in the pharmaceutical and wood industry. It was then when the Prime Minister initiated a broad discussion on the issues of the successful launch of initiatives in other sectors, which could become new drivers of growth for the economy.
Reduction of rent payments in the field of gas production were also the subject of discussions in the expert environment. In November 2017, on the initiative of the Head of Government, a large meeting was held with the participation of key mining enterprises, which resulted in a proposal aimed to simplify licensing procedures and reduce rental rates to 12% when drilling new wells. The Prime Minister underlined this step would become an impetus for sectoral development and achievement of the proper level of gas production.
Volodymyr Groysman drew attention to the fact that changes in gas production are of utmost importance because state companies and private structures demonstrate extraction, renewal of fixed assets, and the introduction of new technologies. At the same time, the officials dealing with licensing and granting of permits - both at the level of the central and at the level of local authorities are rarely stand in the way.
“I will not tolerate those who create barriers to a policy of energy independence . All actors are to be in equal conditions as well as to obtain permits to meet the existing requirements. By the end of the year, we have to make specific decisions, in particular, to simplify licensing procedures, so that we are moving in the direction of gaining energy independence, as well as on new wells - reducing rent payments. This may be a factor in increasing investment (in the development of extraction)," underscored the Prime Minister.
Apart from that, the Head of Government stressed that the "autumn of reforms" should become the basis for "spring of changes" in the field of ease of doing business and industrial development.