Kyiv Oblast and Kyiv Forestry and Hunting Management
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State Agency of Forestry
Kiev Oblast and the Kyiv City Administration of LMG

New land tax on the forest will lead to the healthy wood and the stop of forest formation in Ukraine

The law of Ukraine dated 10.07.2018 № 2497-VIII "on amendments to the tax code of Ukraine and certain laws of Ukraine on stimulation of formation and activity of Family farms" was amended, which provides land tax for all Forest lands of Ukraine.

In the last before the holiday session, voting for seemingly distant to the forest sector of the law, was actually the verdict of the forest economy of Ukraine, wood processing, hunting economy and all involved in these areas.

How was it?

By preliminary taxation system the land tax was fulfilled as a component of the rent board. The subject of taxation for the special use of forest resources was harvested wood in the woods over 40 years and secondary forest materials, side forest use and use of useful properties of forests (recreation, Sport, health improvement, etc.). In this case, the amount of tax in the forests of the state agency of forest resources of Ukraine amounted to 900 mln UAH, of which 50% were made to the State budget, and 50% to local. The land tax was part of this tax.

NET land tax came to the local budget, was calculated on the non-forested land, which is a part of the Land of forestry destination, where farmland, buildings and administrative building of forestry enterprises, lines Power, etc.

New changes

The changes are made to paragraph 273.1 of article 273 of the tax code of Ukraine. In the application of new norms, except for the annuity, is assumed for all the forest land is another tax (in fact it is double taxation).

The introduction of a new land tax on all the forest lands of Ukraine will lead:

  1. To the necessity of taxation of land, which are in the stage of creation of the tree-states (unforested forest crops, log houses, gaps) or on which the plantations are growing up to 40 years of age, and in which it is impossible to get wood, suitable for realization ( More profitable to grow agricultural crops than forest).
  2. All the protective forests of the southern and eastern regions of the steppe and forest-steppe zones, which are already the last three years are without budget support, where 50% of employees are liberated, and the area of forest fires every year increases.
  3. The forests with limited forest use – in the reserves of regional and local importance and other objects of natural-reserved fund are taxed.

With the total implementation of almost 14 billion uah for 2017 year, the total amount of taxes and other obligatory payments of forestry enterprises is more than UAH 5 billion. Additional land tax will be added to this amount from 3 to 10 billion USD, depending on the decision of local communities.

In this case, this will lead:

  1. To the price hike at least 1.5-2 times the wood sold on the market.
  2. Due to the high cost of wood most enterprises of woodworking industry will be stopped, and therefore stop work and forestry enterprises.
  3. To the risks of increasing the intensity of the ruse, which could adversely affect the performance improvement, improving the quality of forests and preserving biodiversity in the forests.
  4. To a significant increase in the cost of keeping hunting farms.

Such a system of taxation, as provided by the amendment, taking into account the other taxes already paid, there is no EU and developed countries in the world.

In this regard, scientists, public council at the State committee, all-Ukrainian public organization «Society of Forestry of Ukraine», association «Furniture», Ukrainian Association of woodworking Equipment and Ukrainian hunting and Fishing association.

Signatories to the appeal offer to cancel the amended legislation, and to correct the situation to take necessary for the development of forestry bills.

We believe that the establishment of the Fund of forestry financing in accordance with the decree of the President of Ukraine № 381/2017 of November 21, 2017. and draft laws "on amendments to the Budgetary code of Ukraine (on improvement of the mechanism of financial support of the forest industry)" № 8239; «on amendments to paragraph 256.3 of article 256 of the Tax Code of Ukraine (concerning financial provision of the forest industry)» № 8240; "On amendments to the Law of Ukraine" on the state budget of Ukraine for 2018 year "(concerning financial support of the forestry industry)" № 8246; "On amendments to the Forest Code of Ukraine (on improving the mechanism of financial support of the forest industry)" № 8238 could solve the issue of financing the complex of measures on protection, protection, expanded reproduction of the South and East, and local budgets can be directed 100% of fees for the special use of forest resources,-said in circulation.

State Agency of Forest Resources of Ukraine supports the mentioned excitement and suggestions of scientists and public.

In some areas, local communities have already begun to make decisions on maximum (5% normative value of 1 hectare of forest land) percent of the new tax payment.

In this regard, the State lisogenanism appeals to the people's Deputies of Ukraine with the request to create a working group in Parliament for quick work of necessary changes to save forestry of Ukraine.