23 Sep 2009 15:42

Ukrainian Econ Ministry proposes resource-users pay percentage of extraction

KYIV. Sept 23 (Interfax) - The Ukrainian Economics Ministry has proposed levying payments from resource users as a percentage of the subsurface resources extracted rather than the current fixed payment.

The proposal is contained in a draft bill prepared by the ministry.

"The proposal is to replace the absolute amounts with a percentage rate of the value of the subsurface resources extracted for the majority of subsurface resources," the Economics Ministry said in the commentary attached to the bill. Many countries have already switched to such a system, it says.

The bill sets the rate at 5% for oil, 10% for natural gas, 1% for coal, 3% for iron ore and 5% for manganese ore.

Percentage rates were introduced in 2008-2009 for silica stone, siliceous sand for metallurgy and sand for glass production, it says.

The ministry also said that during drafting of the bill, it was deemed advisable to charge a one-time payment for subsurface resource use that includes a fee for geological exploration work.

It was reported earlier that Ukraine sharply increased fees for production of individual subsurface resources in 2008, specifically dolomite (12 times), gypsum (18 times) and limestone for sugar production (9 times). The rates for other resource types was increased 14.4% and by another 43.9% in 2009