Legal framework
• Tax Code of Ukraine, Environmental Tax
Section. Took effect on 1 January 2011
Fuel taxes
• Tax on the sale of 12 kinds of domestically
produced fuel
• On 14 kinds of fuel brought into the customs
terr...
Fuel taxes and their
environmental differentiation
Rates of environmentally-related tax on diesel
fuel are set depending o...
Who pays the fuel tax
Tax payees that:
• Sell the fuel they produce
• Bring fuel into the customs territory of
Ukraine
End-of-life motor vehicles
utilisation tax
• Motor Vehicles Utilisation Law of Ukraine of 4
July 2013 sets out a legal, in...
End-of-Life motor vehicles
utilisation tax
• Law of Ukraine of 4 July 2013 amended the
Tax Code of Ukraine in so far as pa...
Who pays the vehicle
utilisation tax
• Persons who import motor vehicles and/or car
bodies into the customs territory of U...
Who does not pay the
vehicle utilisation tax
Persons who bring in motor vehicles:
• for diplomatic missions
• which are mo...
Use of utilisation tax revenues
• Funds are used to recover costs on recycling of
motor vehicles collected by collection p...
What was planned
In 2013, it was planned to introduce a tax on a broader
range of goods:
• Products in spray cans (ozone-d...
Tax rates
• It was planned to set environmentally-related tax
rates of 0.1% to 1% of value
or
• fixed rate (light bulbs – ...
Reasons why they have not
been Introduced
• Environmentally-related taxes on air emissions
and waste disposal have not bee...
Conclusions
• The economic instruments framework in place
in Ukraine should be reformed drastically based
on experience in...
Thank you
EaP GREEN: Environmentally related product taxes in Ukraine - Design Issues
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EaP GREEN: Environmentally related product taxes in Ukraine - Design Issues

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The presentation discusses mainly the use of fluel taxes in Ukraine. The general legal framework and an overview of some other planned environmentally relevant taxes is also included. The presentation was delivered at the meeting on "Economic instruments for greener products in the EU's Eastern Partnership countries" (EaP GREEN).

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EaP GREEN: Environmentally related product taxes in Ukraine - Design Issues

  1. 1. Legal framework • Tax Code of Ukraine, Environmental Tax Section. Took effect on 1 January 2011
  2. 2. Fuel taxes • Tax on the sale of 12 kinds of domestically produced fuel • On 14 kinds of fuel brought into the customs territory of Ukraine depending on product code
  3. 3. Fuel taxes and their environmental differentiation Rates of environmentally-related tax on diesel fuel are set depending on sulphur content: • UAH 79.9 per tonne – sulphur content above 0.2% • UAH 35.25 per tonne – sulphur content not more than 0.005% • Rates for biofuel are 20% lower than those for fuel without bioadditives
  4. 4. Who pays the fuel tax Tax payees that: • Sell the fuel they produce • Bring fuel into the customs territory of Ukraine
  5. 5. End-of-life motor vehicles utilisation tax • Motor Vehicles Utilisation Law of Ukraine of 4 July 2013 sets out a legal, institutional and economic framework for recycling of motor vehicles in Ukraine to ensure environmental safety, protection of ambient environment and human life and health
  6. 6. End-of-Life motor vehicles utilisation tax • Law of Ukraine of 4 July 2013 amended the Tax Code of Ukraine in so far as payment of environmentally-related tax on recycling of end-of-life motor vehicles • The Law took effect on 1 September 2013 • As per Article 11 of the Law of Ukraine on the 2014 State Budget of Ukraine, all the proceeds from the recycling tax go to the state budget
  7. 7. Who pays the vehicle utilisation tax • Persons who import motor vehicles and/or car bodies into the customs territory of Ukraine • Manufacturers of motor vehicles in the customs territory of Ukraine to be sold in the domestic market in Ukraine • Those who purchase motor vehicles from persons that are not payers of the tax
  8. 8. Who does not pay the vehicle utilisation tax Persons who bring in motor vehicles: • for diplomatic missions • which are more than 30 years old Persons who undertook an obligation to recycle them Persons who purchase motor vehicles with budget funds (for persons with disabilities, special-purpose ones)
  9. 9. Use of utilisation tax revenues • Funds are used to recover costs on recycling of motor vehicles collected by collection points in the manner set by the Cabinet of Ministers of Ukraine (UAH 960 mln = more than USD 100 mln in 2014). • Currently, environmentally-related tax on recycling of end-of-life motor vehicles operates as product-related tax and as an element of extended producer responsibility.
  10. 10. What was planned In 2013, it was planned to introduce a tax on a broader range of goods: • Products in spray cans (ozone-depleting substances) • Light bulbs • Accumulators • Polymeric materials • Raw rubber, rubber, and items made of them • Oils • Household cleaning products • Natural gas used to generate electric power
  11. 11. Tax rates • It was planned to set environmentally-related tax rates of 0.1% to 1% of value or • fixed rate (light bulbs – EUR 1 per piece)
  12. 12. Reasons why they have not been Introduced • Environmentally-related taxes on air emissions and waste disposal have not been abolished, which could have resulted in double taxation of various kinds of pollution and products (e.g. use of natural gas, disposal of some types of waste)
  13. 13. Conclusions • The economic instruments framework in place in Ukraine should be reformed drastically based on experience in the OECD and EECCA countries • The priority is to introduce a tax on environmentally-harmful products and at the same time abolish, or reduce the number of, pollution taxes
  14. 14. Thank you

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