Ukrainian President Viktor Yanukovych has signed a law introducing floating excise duties on petroleum products.
According to the document, the current rates on excise taxes will be used as base rates until the end of 2012.
Every ten days, an adjustment amount that cannot surpass 50% of the base rate will be added or subtracted to the base rate (depending on the average cost of Brent crude (DTD) on the ICE for the previous ten days).
The new law says that if the average exchange price for oil is below $105/barrel, an adjustment amount calculated as the difference between $105 and the exchange price (taking into account the U.S. dollar to euro exchange rate for the corresponding ten days and the number of barrels in a tonne – 7.62) will be added to the base rate. In other words, the excise tax will be raised.
At an average exchange price of $105-$125/barrel of oil, there will be no adjustment to the base rate.
If the exchange price for oil surpasses $125/barrel, an adjustment amount calculated as the difference between $125 and the exchange price (taking into account the U.S. dollar to euro exchange rate for the corresponding ten days and the number of barrels in a tonne – 7.62) will be subtracted from the base rate. In other words, the excise tax will be lowered.
The excise tax for aviation gasolines, fuels for jet engines and liquefied gas will not be subject to adjustments.
The central body of the executive authorities ensuring the implementation of state policy in the oil and gas complex must publish the value of the adjustment amount and the average price for one barrel of Brent crude (DTD) on the ICE for the previous ten days by no later than 1:00 p.m. on the first day of the current ten days.
The Verkhovna Rada adopted a law introducing a floating excise duty on petroleum products on May 15.
Voting for the draft legislation introducing changes to the Tax Code of Ukraine (10379) included 247 votes in favor, out of the 321 registered people’s deputies.
