Excise tax on green energy violates commitments to international investors
The intentions of the Cabinet of Ministers to introduce an excise tax on "green" electricity are a violation of previously granted state guarantees and a violation of obligations to international investors. This norm must be excluded from bill No. 5600 on amendments to the Tax Code of Ukraine.
This is stated in a joint statement by the Ukrainian Association of Renewable Energy (UARE), the European-Ukrainian Energy Agency, and the Ukrainian Wind Energy Association on Facebook.
"We express our categorical disagreement with the introduction of an excise tax on electricity from renewable energy sources (RES), as provided for by draft law No. 5600, adopted on July 1, 2021, by the Verkhovna Rada in the first reading," investors emphasize.
The UARE noted that the introduction of an excise tax is a de facto reduction of the "green" tariff by 3.2% for existing power plants from renewable energy sources, which is a violation of the obligations undertaken by the Ukrainian government to investors developing alternative energy in the country.
"Such actions indicate a disregard for current legislation and obligations to investors, adopted by the government and the Verkhovna Rada a year ago. Moreover, such an initiative will increase distrust in government bodies, further harm the investment climate in Ukraine and make it impossible to attract funds for new energy and environmental projects," the UARE noted.
Investors called for the exclusion of the relevant norm from the bill on amendments to the Tax Code (No. 5600).
"We call on the people's deputies of Ukraine, the Chairman of the Verkhovna Rada Dmytro Razumkov, and the Committee on Finance, Tax and Customs Policy to finalize this draft law and exclude the provision on the introduction of an excise tax on the sale of electricity from RES, taking into account all risks of adopting such a decision for Ukraine's image as a stable partner and an investment-attractive country," the statement emphasizes.
It should be recalled that in early June, the Cabinet of Ministers registered bill No. 5600 on amendments to the Tax Code, which, among other things, proposes to introduce an excise tax on "green" energy in Ukraine at a rate of 3.2%. On July 1, this bill was supported in parliament in the first reading.
Earlier, specialized associations of renewable energy stated that the introduction of an excise tax on "green" electricity de facto worsens the conditions for the economic activity of resource producers from renewable sources, is a gross violation of investors' rights, will harm the investment climate and make it impossible to attract funds for new environmental projects.
At the end of June, the EBRD, the Black Sea Trade and Development Bank, the Dutch Development Finance Company, the Institute for Development Finance, and the Energy Community Secretariat wrote a letter to the Chairman of the Verkhovna Rada, Dmytro Razumkov. They emphasized that the probable introduction of an excise tax on electricity production from renewable sources in Ukraine contradicts the EU's decarbonization goals, threatens the country's plans for integration with the European energy system, and therefore this norm should be revised.
Minprom