In January-August 2018, Ukrnafta, one of top 5 tax payers in Ukraine, paid UAH 10.03 bln in taxes, including repayment of the overdue tax debt. Ukrnafta has increased tax payments this year in comparison to 2017 when it paid UAH 10.2 bln for the full year and 2016 when it paid a total of UAH 8.1 bln.

The company continues to repay the outstanding tax debt along with all current taxes. In 8 months 2018, Ukrnafta has paid UAH 1.03 bln of its overdue tax debt. The conservative plan envisages repayment of UAH 1.2 bln by the end of 2018.

The risks to continued payment of taxes are twofold: Ukrnafta being unable to produce because of the regulator blocking Ukrnafta’s production licenses, and failure to convert production into cash because of the instability of the state-run oil auctions where the company is required to sell its oil and condensate.

Ukrnafta recorded UAH 11.05 bln of outstanding tax debt as of the end of 1H 2018. This includes the debt owed by the company and its structural units. 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.