Draft

Parliament upheld new tobacco taxation mechanism

The Verkhovna Rada upheld amendments to the Budget Code in the first reading. These establish the mechanism for crediting tobacco excise taxes to local budgets.

Draft Law No. 5719 amends the Budget Code to get it into line with the tax standards set out in tax Draft Law No. 5600. At the same time, the latter is currently “stuck” at the second reading stage.

Thus, the document envisages obliging the Treasury to automatically credit the excise tax on retail sales of tobacco products and liquids for e-cigarettes to local budgets pro rata with shares.

The share is calculated as the ratio of the cost of goods sold (tobacco and liquids for “e-devices”) in a given area for the reporting month to the total value of these categories of goods as a whole for the reporting month in Ukraine.

The tax authority will calculate such shares on a monthly basis.

The Budget Committee upheld the document before the first reading but noted the need for its further revision prior to the second reading.

Draft law crucial for timber market adopted in first reading

The Verkhovna Rada has adopted new regulations on the timber market’s operation in the first reading.

The revised Draft Law is designed to make the operations of the timber market’s participants open and public and ensure free competition and sustainable use of forest resources.

First and foremost, the Draft sets out clear functions of the forest portal, which is to be created as a tool to increase market transparency, in view of the existing feature set of the Electronic Timber Accounting System.

Timber will only be sold at electronic auctions or on the terms of the offer. This will stop the practice of direct contracts, which has been a significant corruption-causing factor.

Information on the sale of timber and timber products will be made public and available to all market participants on the forest portal. The sale of timber and timber products will be allowed subject to a declaration of timber processing.

Moreover, timber sellers will be liable for refusing to supply buyers with a certain amount and quality of the resource, for which the funds were paid. And vice versa, buyers will be liable for non-compliance with the provisions of the sales and purchase agreement.

The Draft also regulates the application of the offer and its acceptance, sets the principles of electronic auctions, the requirements for disclosure of information about auctions that have been held.

Following the law’s adoption, the Commission to review complaints about the timber trade to protect market participants will be established.

Furthermore, amendments to the Law On Commodity Exchanges take forest resources out of exchange trade, and they will be transferred to electronic auctions.

ADVERTISEMENT