Parliament Raises Taxes.

On July 7, 2005 the Ukrainian parliament increased taxes for some industries by approving appropriate amendments to the 2005 Budget law. Royalties for oil and gas extraction went up by 83% to 108.9 per mt and dues to the Pension Fund applied to tariffs for mobile services were increased from 6.0% to 7.5% (see netto-effects of mobile surcharge changes in today’s telecom comment). In an effort to increase taxable income, the Parliament agreed to cut the percentage of insurance paid by companies to 5% of gross expenditures from 10%. Concorde Capital: For the last six months the 2005 budget has performed well, generating revenues 6.1% higher than expected and creating a surplus of USD1.3 bln. However, wage increases and social payments envisaged in the amended budget as well as  wage arrears to coal miners will require additional funds during 2H2005 from the government.