The total amount of taxes and fees paid by ArcelorMittal Kriviy Rih amounted to almost UAH 8.7 billion in 2019. Of the total amount of taxes and fees, direct payments to budgets of various levels account for UAH 3.3 billion, the share of VAT paid at customs made almost UAH 4.4 billion, and for social security tax made almost UAH 957 million.
The state budget received tax payments from the company in the amount of UAH 1.7 billion. In 2019 environmental tax remissions increased significantly, which made UAH 340 million, in total, up by UAH 116 million YoY. This increase was due to a significant rise in the environmental tax rate for CO2 emissions.
ArcelorMittal Kriviy Rih transferred UAH 1.6 billion to the local budgets. This amount increased by almost UAH 600 million compared to 2018 that occurred mainly due to land fees (+UAH 391 million) and personal income tax (+UAH 201 million). The increase in land fees was due to significant increase in loan fee by Kriviy Rih City Council. The increase in income tax payments is explained exclusively by the increase of the salary rate and other labor payments at the company. While in 2018 the company transferred UAH 645 million of personal income tax to the local budget, in 2019 the amount of income tax amounted to UAH 846 million. The growth of both income tax and the base for its calculation – the salary fund – amounted to more than 31%.
Andrey Maximov, Head of Tax Service, ArcelorMittal Kriviy Rih: “In 2019 our company managed to maintain a stable level of taxes and fees. Their total amount almost did not change compared to 2018 despite the crisis in the metallurgical industry and the negative financial results of the company, which is associated with a drop in prices, as well as decline in demand for metal products and iron ore on the world markets. Even in such a difficult situation, the overall tax burden of ArcelorMittal Kriviy Rih remains virtually unchanged. This is due to a significant increase in tax payments, which are not directly dependent on the results of the financial and economic activities of the company. In the first place, it concerns land fees and environmental tax. If we talk about the environmental tax, the amount of its total remissions increased by 52% in 2019. While in 2018 the total amount of the environmental tax paid by the company was UAH 223 million, in 2019 it increased to UAH 340 million, of which UAH 134 million was the payment for CO2 emissions. Since January 2019 Ukrainian companies have been paying 25 times more for carbon dioxide emissions than previously. In accordance with current legislation, payments for carbon dioxide emissions are now fully received in the state budget of Ukraine. The local budgets of the territorial communities, where the sources of emissions are located, are no longer receiving such payments, which is unfair. Therefore, ArcelorMittal Kriviy Rih is in solidarity with other companies of the industry and is convinced that environmental tax funds should be used more efficiently, primarily at the local level, and not be “dissolved” in the total budget income. It would be more correct for a part of the environmental tax funds to remain at the disposal of the companies themselves and used by them exclusively for the implementation of environmental projects and programs in industrial cities and regions”.
ArcelorMittal Kriviy Rih steadily pays taxes and fees to the budget and fully carries out its obligations to the state and the city. It is important that the state, in return, carries out its obligations to business. This, first of all, concerns the reimbursement of value added tax, because throughout the whole 2019, the company faced the problems of untimely tax refund almost every month. Despite the difficulties associated with a slowdown in global economic growth and a significant deterioration in market conditions, ArcelorMittal Kriviy Rih is still one of the largest taxpayers in the mining and steel industry, and in Ukraine, as a whole. Since the new owner came in 2005 the company has transferred over UAH 69 billion of taxes and fees to the state. (AMKR/Ukrainian metal)