Ukrainian Railways endorses initiative on land tax benefits

14 January 2020

A bill has been registered in Ukraine’s parliament that cancels a tax on land used by railroad operators, Ukrainian Railways (RAILUA) reported on Jan. 11. In its statement, the company welcomed the initiative, citing the tax benefit experience of numerous European countries. The bill's initiators also cited current Ukrainian legislation that provides the same tax privilege on automobile roads.

 

Ukrainian Railways estimates that it spent UAH 4.2 bln on the land tax in 2019, or 3.5x more yoy. The hike occurred due to changes in tax legislation in 2019 that cancelled a 75% discount for the land tax on railroad operators.

 

Alexander Paraschiy: The adoption of this bill would save costs for Ukrainian Railways in the amount of over 20% of its annual EBITDA, thereby enabling it to accumulate much cash for investments into infrastructure. However, we doubt that the parliament will support an initiative that would significantly cut budget collections and would lead to the swelling of the state budget deficit (planned at the level of UAH 94.3 bln in 2020).

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