The Verkhovna Rada, Ukraine's parliament, has extended the term of the zero rate of value added tax (VAT) on Naftogaz Ukrainy's natural gas imports until Dec 31, 2012.
A total of 272 from the 363 MPs registered at the session voted in favor of this measure stipulated in a draft law on amendments to Ukraine’s Tax Code.
The code earlier expected the zero VAT rate for Naftogaz’s gas imports to expire on October 1, 2011.
In keeping with the explanatory note to the bill, the zero rate will let safeguard the Ukrainian producer and ensure the competitiveness of local production through the optimization of the natural gas price.
Naftogaz plans to reduce natural gas imports next year by 31.5% (12.6 billion cubic meters) from this year’s import target, to 27.4 billion cubic meters.
