Ukrainian Railways endorses initiative on land tax benefits

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).