In January-May 2018, PJSC Ukrnafta paid UAH 6.2 bln in taxes, including UAH 580 mln of the overdue tax debt. The company is repaying the outstanding tax debt along with all current taxes. Ukrnafta’s financial plan for 2018 envisages repayment of UAH 1.2 bln of the overdue tax debt, which stood at UAH 11.85 bln as of the end of 2017.
Ukrnafta emphasizes that the risks to repayment of the overdue tax debt may come from attempts by the regulator to block its production licenses. Another risk factor is the instability of the state-run oil auctions where the company is required to sell its oil and condensate and the starting prices are set based on the formula approved by the government. Last year, the majority of the state-run oil auctions failed which had a negative impact on the stability of the company’s cash flow. In 2018, four out of nine state-run oil auctions failed. Ukrnafta’s proposals to reform the state oil auction have not been implemented in full and the competition at the auctions remains restricted.
Note to editor
Ukrnafta recorded UAH 11.85 bln of outstanding tax debt as of the end of 2017. This includes the debt owed by the company and its structural units, as well as the debt from the joint activities. Ukrnafta’s approach to recording and reporting tax debt is consistent with the Ukrainian law and is supported by the independent external auditor. The bulk of the debt accumulated in 2014-2015 before the management change.
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