Ukraine is preparing massive layoffs that will put tens of thousands of people out of work – the reason has been announced
A doubling of the land tax for the mining sector could lead to a complete shutdown of enterprises in this industry in Ukraine. This could leave a large number of people unemployed, according to Serhiy Bilenky, head of the Federation of Metallurgists.
Industry representatives have already submitted an official appeal to the Chairman of the Verkhovna Rada and the heads of factions and deputy groups. The document states that the draft law “On Amendments to the Tax Code of Ukraine in Connection with the Adoption of the Law of Ukraine ‘On Integrated Prevention and Control of Industrial Pollution'” requires either rejection or serious revision.
Bilenky emphasized that a 2.6-fold increase in the land tax rate will have a devastating impact on the industry, which is already in a critical situation. Many companies that have been successfully operating and paying taxes for years have already stopped their activities.
He also noted additional financial burdens on businesses, including rising sea freight prices, a shortage of personnel due to mobilization, and loss of access to external financing due to high military risks.
Bilenky stated that assuming that the industry would withstand a new tax increase is a frankly unpatriotic position. In addition to land tax, mining enterprises also pay income tax, rent, and a fee for the disposal of low-hazard waste. So, for one activity, they pay four different taxes.
Bilenky also noted that in the current economic situation, enterprises do not have a sufficient margin of safety. Increased tax pressure could lead to mass closures of enterprises, which in turn would increase social tension.
If enterprises cease operations, this could lead to the closure of adjacent metallurgical and coke-chemical plants, resulting in a broader economic crisis that would affect more than 200,000 workers. “The state budget will suffer multi-billion-dollar losses,” he concluded.
